COST CONTROL

CONCEPT
Irene Ratri Andia Sasmita, STP.,MP
Objective
 List and define the terms related to food &
beverage cost control
 Explain objective of food and beverage

control
 Explain various types of cost in the food

service operation
What is the control?
Definition Control
 Control is a process by which a manager
attemps to direct, regulate and restrain the
action of the people in order to achieve the
desired goal
Objective of a food and beverage
control
 Analysis of income and expenditure
 Establishment and maintenance of standards
 Pricing
 Prevention of waste
 Management information
What is the cost?
Cost is defined as expenditure to obtain goods
and services who benefit company more than
one of the operation and otherwise.
Definition Cost Control
 The process whereby a manager attempts to
regulate costs and guard againts excessive
cost it known as cost control
 Exact methods for cost control will vary from

place to place, depending in part on nature

and scope of operation, but the principle
behind varying methods will be constant
 Two of the principal causes of excessive costs

are inefficiency and waste

Element Cost
 Material
 Labour
 Expense
Element Cost

Material
To produce or manufacture material is required
Element Cost
 Labour
Labour is the main factor of production. For
conversion of raw material into finished goods,
human resource is needed, and such human
resource is termed as labour. Labour cost is
the main element of cost in a product or
service.
Element Cost
Expense
All cost incurred in the production of finished
goods other than material cost and labour cost
are termed as expenses.
Classification of Cost
1. Cost behaviour basis
Fixed cost
Variable cost

2. Cost inventory basis

 Product cost
 Non product cost

3. Cost relation to cost centre basis

 Direct cost
 Indirect cost
Classification of Cost
 Fixed Cost
A cost of which in total do not change the
number even though the number of the
production of change.
Example : rent, building, machine, etc

 Variable Cost
Cost the number of the total is changed in
proportion to the changes of volume of activities
Example : cost of raw material
Classification of Cost
 Product Cost
The cost of that is used during the production
process consisting from raw materials
directly, labor directly, and overhead factory.

 Non product Cost

The cost of which is connected with a
intervals of time
Example : marketing cost, general and
administration cost
Classification of Cost
 Direct Cost
The cost which causes the only is because it is
financed. If something funded does not exist, the cost
of direct not going to happen.
Example : Labor costs who works in the department of
maintenance is the cost of direct the department of for
the department of maintenance

 Indirect Cost
The cost is not only caused by something financed
Example : insurance cost, salary director, salary HRD,
etc