The purpose of Food and

Beverage Cost Control

• The principal purpose of food and beverage
planning and control systems is
• to avoid excessive costs by reducing waste and other
forms of loss to a minimum, without sacrificing the quality
or quantity of the food which goes to the customer.
• An effective control procedure will serve other
purposes as well:
• 1.aid in developing popular menus
• 2.aid in improving the quality of the product
• 3.aid in pricing for profit
 The Flow of Costs Through the
Various Food and Beverage Activities
• Basic Operating activities
Purchasing
 Receiving
 Storing
 Issuing
----- pre-preparation(butchering,vegetable cleaning,etc.)
portioning
preparation(cooking,baking,salad and sandwich making,
etc.)
------service
------accounting and sales
 Study Highlights1
 1.Food and Beverage costs in the majority of restaurant
operations represent the largest single expenditure of the
revenue dollar.
 2.Food and beverage costs are influenced by the way the
various activities such as purchasing,receiving,storing,issuing,
pre-preparation,preparation, and accounting are performed.
 3.Food and beverage control procedures should serve as
effective:tools of management” to aid in the control of costs.
They should be designed in such a way that the most effective
allocation of time is made to the planning,comparing and
corrective action phases of control, with the emphasis on
planning.
 4.F&B control systems must be effectively used by
management before they can be a valuable aid in the control
of costs.
 Study Highlights
 5. F&B control systems are supported by various types of “standards: e
stablished by management,e.g., standard purchase specifications, stand
ard portion sizes, standard recipes, etc.

 6. F&B control systems should be simple and flexible.

 7. Management is responsible for cost control, and should make use o
f every tool and technique at its disposal in order to keep costs in line wit
h what they should be.

 8. In large, complex F&B operations, management is given cost control

assistance in the form of staff specialists such as a food and beverage c
ontrol office.

 9. In small F&B operations, the manager and his operating staff ust alon
e maintain the necessary planning and control procedures as part of their
day-to-day responsibilities.
Chapter 2.
Four Basic Operating
Procedures:
Food Purchasing,Receiving,Storing and Issuing

• The primary objective of each of the

basic operating procedures (should be kept
in mind during the study of the chapter)
• Purchasing: to obtain the best quality of merchandise, based on
established specifications, at the best possible price.
• Receiving: to obtain the quality and quantity of merchandise
ordered and at the quoted price.
• Storing: to maintain adequate stocks of merchandise on hand,
and to avoid loss through theft or spoilage.
• Issuing: to insure proper authorization for the merchandise to be
released and to properly account for each day’s issue.
 2.Standard Purchase
Specification
• A purchase specification is a concise description
of the quality, size, and weight or count factors
desired for a particular item
• Management establishes standard purchase
specifications based upon a thorough study of the
menu needs and their merchandising and pricing
policies
• The purchasing agent, the purveyors of the
company, and the company’s receiving clerk
should each have a set of the established
specifications
 Study Highlights
 Purchasing
1.There are 3 basic requisites for effective purchasing;(a)a qualified and honest
purchaser;(b)a sound set of standard purchase specifications©effective buying
methods and procedures.
2.Standard purchase specifications are concise descriptions of the quality, size,
and weight or count factors desired for a particular item.
3.copies of the purchase specifications should be in the hands of;(a)the
purchasing agent,(b)the company’s purveyors, and ©the company’s receiving
clerk.
4.Constant follow-up and evaluation procedures are necessary in order to insure
the continuous adherence to established policies and procedures.
 Receiving
1.The personnel responsible for receiving should know all aspects of the
merchandise they are called upon to evaluate and receive.
2.Food merchandise should be checked from the viewpoint of
quality,quantity,specification, and price.
3.All merchandise accepted should be supported by an invoice, and the details of
the invoice summarized on a daily receiving sheet.
4.Constant follow-up and evaluation checks are necessary to insure proper
performance of the receiving procedures.
 Study Highlights
1.Definition of Terms
• 1.Cost of Food Consumed
• 2.Cost of Food Sold
• 3.Month-end Actual Cost of Food Consumed
• 4.Daily Actual Food Cost
• 5.Standard Food Cost

2.Basic Formula for Calculating Actual Food Costs

• Opening inventory + purchases = cost of merchandise available
• Merchandise available – closing inventory = cost of food consumed
• Food consumed + or – charges or credits = cost of food sold
• The Closing Inventory of the ‘Current ‘ month becomes the opening
inventory of the following month. Care and accuracy should be the
rule in determining inventory value