CHAPTER 1: INTRODUCTION TO FOOD AND BEVERAGE CONTROL SYSTEM

The expense to a
business for beverages
consumed e.g.
cost

of beverages sold,
given away, stolen
or spilled.

CHAPTER 1: INTRODUCTION TO
FOOD AND BEVERAGE
CONTROL SYSTEM

cost
The expense to a business for food, incurred when food is consumed e.g.
cost
of food sold, given away, stolen or waste.

Overhead
cost
Include all expenses that are neither food, beverage nor labor, e.g. rent, insurance, utilities, etc.
All
costs
other than prime
cost
.

OUTLINE


COST CONCEPT
SALES CONCEPT
COST PERCENTAGE CONCEPT
COST
CONCEPT
In food and beverage business,
cost
is defined as the expense to a foodservice business when the goods are consumed or the services are rendered
Beverage
cost
Labor
cost
It is the sum of
cost
of employees necessary to run the business, which includes salaries, wages and employee benefits e.g. EPF, SOCSO, healthcare insurance, paid leave.
It is also known as payroll
cost

There are
four
important
costs
a foodservice manager should concern:
Food cost
Beverage cost
Labor cost
Overhead cost
At the end of this lesson, students should be able to:
identify different types of
cost
in an operation
understand basic formulas in accomplishing various calculations
by Mohd Aliff
Types of
costs
Fixed and Variable Costs
Controllable and Non-controllable Costs
Unit and Total Costs
Prime Costs
Fixed
costs
The
costs
that are usually unaffected by changes in sales volume e.g. rent, insurance, depreciation.
Variable
costs
The
costs
that are clearly related to business volume e.g. costs of materials
When the sales volume increase, VC will increase as well and vice versa
Controllable
costs
The
costs
that can be changed in short term e.g. utilities, advertising.
Non-controllable
costs
The
costs
that cannot normally be changed in short term e.g. rent, insurance, depreciation.
Unit
cost
Cost
per unit e.g.
cost
per portion of particular menu item
Total
costs
Sum of all
costs
for a given period of time e.g. total
costs
of producing chicken rice for a day
Prime
costs
Sum of all food, beverage and labor
costs
The greatest interest to most managers and owners
Play an important role in determining profit and the success of an establishment
SALES
CONCEPTS
It refers to the revenue generated from the exchange of products and services for value. It has two basic groups:
Monetary terms
Non-monetary terms
Monetary
Terms
Total sales
Total sales by category
Total sales per server
Total sales per seat
Sales price
Average sales
Average check
Average sales per server
Non-monetary
Terms
Total number sold
Total covers
Average covers
Seat turnover
Sales mix
COST PERCENTAGE
CONCEPTS
COST
SALES
COST %
COST-TO-SALES RATIO
How it
works
COST =
SALES x COST %
SALES =
COST
COST %
COST % =
COST
SALES
X 100
Let's try...
It
continues
...
FOOD COST % =
FOOD COST
FOOD SALES
X 100
BEVERAGE COST %
BEV COST
BEV SALES
X 100
=
LABOR COST %
LABOR COST
TOTAL SALES
X 100
=
and
continues
...
F & B COST %
F & B COST
TOTAL SALES
X 100
=
OVERHEAD COST %
OVERHEAD COST
TOTAL SALES
X 100
=
PROFIT % =
PROFIT
TOTAL SALES
X 100
1. Calculate the cost percent if
a) sales, RM100,000; cost, RM43,000
b) sales, RM230,000; cost, RM87,000
2. Calculate the sales if
a) cost, RM9,000; cost percent, 33%
b) cost, RM2,377; cost percent, 25.3%
Important
Concepts
Revenue
is the dollar amount you take in
Expenses
are costs required to operate the business
Profit
is the amount remain after all expenses have been paid
Revenue
-
Expenses
=
Profit
Understanding
Income Statement
Also known as
Profit and Loss Statement
A simplified statement that consists revenue, expenses and profit or loss
It describes the efficiency and profitability of the operation
Simplified
Profit and Loss Statement
RM
Sales xxx

- Cost of Sales (xx)

= Gross Profit xxx

- Expenses (xx)

= Profit/ Loss xxx
Exercise
Below are forecasted sales and costs of Jack's Restaurant for the upcoming year. Prepare an income statement by using the following information:

Food sales : RM35,500
Beverage sales: RM18,200
Food cost : 32% of food sales
Beverage cost : 16% of total sales