CHAPTER 3

COST CONTROL
 What is revenue? (147)

• The income from sales before expenses

 What is the definition of a cost? (147)

• The price an operation pays out in the

purchasing and preparation of its products or the
providing of its service.
 What are the 4 main categories of costs?
(147)

• Food costs
• Beverage costs
• Labor costs
• Overhead costs
What is another name for a fixed cost? (148)

• Non-controllable cost
 What are 2 examples of controllable costs?
(149)

• Food cost
• Hourly wage portion of labor cost
 What is a fixed cost? (151)

• Costs that remain the same regardless of sales volume

 What is an operating budget? (151)

• A financial plan for a specific period of time

 What is a forecast? (152)

• A perdition of sales levels or costs that will

occur during a specific time period
Forecasting revenue is usually determined by
looking at what 2 things? (152)

• Historical data
• Average sales per customer
 How do you calculate the average sales per
customer? (152)

• Total dollars divided by the total number of customers

What does the sales history show? (153)

• It is a record of the number of portions of

every item sold on a menu
What is a production sheet? (153)

• It is a list of all of the menu items that are

going to be prepared for a given date.
The number of times a menu item is sold during
a particular time period is known as what? (153)

• Sales history
 What is a profit and loss report? (156)

• A compilation od sales and cost information

for a specific period of time
 List the 7 stages of the flow of food process. (165-166)
• Purchasing
• Receiving
• Storage
• Issuing
• Preparation
• Cooking
• Service
What is the definition of food cost? (167)

• The actual dollar value of the food used by an

operation during a certain period
 How do you calculate food cost?

• (See page 167)

 What is inventory? (167)

• This represents the dollar value of a food product in

storage and can be expressed in terms of units, values
or both
 Define opening inventory. (167)

• The physical inventory at the beginning of a

given period (such as the month of April)
 Define closing inventory. (167)

• The physical inventory at the end of a given period.

What is the formula for calculating food cost percentage? (168)

• Total food cost / Sales = Food Cost Percentage

 What are the 2 methods used to determine the cost of ingredients
in a standard recipe? (170-171)

• As purchased
• Edible portion
 What is as-purchased method? (170)

• It is used to cost an ingredient at the purchase price

before and trim or waste is taken into account.
What is the edible portion method? (171)

• It is used to cost an ingredient after trimming and removing

waste so that only the usable portion of the item is reflected.
What is a food production chart? (176)

• It is a form that shows how much product should be

produced by the kitchen during a given meal period.
 What is a sales history used for? (176)

• It is critical in helping management forecast how

many portions of each menu item to produce on
a given day.
 What is contribution margin? (178)

• The portion of dollars that a particular menu item

contributes to overall profits.
 How do you calculate contribution margin? What is the
contribution margin if a menu item sells for 15.00 and has cost of
33% to make?
 What is the straight markup method? (178)

• Multiply raw food costs by a predetermined fraction

 What is the average check method? (178)

• The total revenue is divided by the number of seats,

average seat turnover and days open in one year.
 What 4 factors affect labor costs? (187)

• Business volume
• Employee turnover
• Quality standards
• Operating standards
 How do you calculate employee turnover?
(189)

• It is the number of employees hired to fill one

position in a year’s time
What is listed on a master schedule? (190)

• It lists no names. It just lists the positions and

the number of employees in those positions.
What is a chart that shows the employee’s names and the days and
times they are to work? (191)

• Crew Schedule
 List 3 things a good staff contingency plan should include. (192)

• Cross training employees

• Identifying shift leaders
• Having on call employees
 What is cross training? (192)

• Training employees to handle responsibilities in

areas of the operation aside from their primary
work responsibilities
 Explain the process of having on call
employees. (192)

• A certain number of employees must call their

operation at a predetermined time to find out
whether they have to work that day.
What is the best time for restaurants and foodservice operations to
receive deliveries? (199)

• When the operation is slow

How often should fresh fish be delivered to an operation? (200)

• Daily
How often should meat be ordered and delivered to an operation?
(200)
• At least 2 or 3 times a week
What is the document from a vendor that lists such details as items
purchased, date of order, purchaser and sales price? (201)

• Invoice
What is another name for an invoice? (201)

• Bill
 What does it mean to take a physical
inventory? (204)

• To count and record the number of each item

in the storeroom