Cost Control Quiz - Ch. 7 & 8

Sales history

Forecasts of future sales are based on this

Sales forecast

Predicts the number of guests you will serve and the revenues they will generate in a future time period

Sales

Revenue

Sales volume

number of units sold

Sales to date

the cumulative total of sales reported in the unit

Sales history

The systematic recording of all sales during a pre-determined time period

Guest count

The number of people you have served

POS System

System that shows:

• Revenue in a given time period

• Number of guests

  Average sales per guest

Average sales per guest (or check average)

Total Sales / Number of guests served

Sales histories examples

-Revenue

-Number of guests sold

-Average sales per guest

-Number of a particular menu item served

-Number of guests served during a specific meal or time period

-Method of meal delivery (ex. drive-thru or counter sales)

Types of Sales Histories

-By operating period (week, month, etc.)

-By day of the week/for a given day

-By entree item (degree of popularity/popularity index)

Weather

Bad weather usually has a negative impact on sales volume (hotel restaurants are the opposite)

Other information in sales histories

Weather, special events, faulty kitchen equipment, construction in the area

popularity index

the ratio of portion sales for a given menu item to total portion sales for all menu items

Popularity Index

Portion Sales for Item / Total Portion Sales

Sales forecasting

1. Total the numbers of customers anticipated for particular days or meals

2. Judge the extent to which these conditions will exist

3. Estimate the total business volume for the day or dates

4. Forecast the anticipated number of sales of each item on the menu

Production sheet

A form on which one lists the names and quantities of all menu items that are to be prepared for a given date

Manager

Person who fills out the production sheet and forwards it to the chef

Purpose of a production sheet

To control production and eliminate waste

Purposes for monitoring quantity production

-To determine whether the sales forecast has been reasonably accurate in predicting (total number of customers and their preferences)

-To judge how closely the chef has followed the production standards

Void sheet

A record of every portion that has been returned - completed by a supervisor or chef (name of item, check number, server number, reasons)

True

(True/False) Servers are important contributors to the development of accurate sales histories

True

(True/False) Forecasts of total anticipated volume for a given day should take into account such factors as weather and the condition of the economy in the surrounding community

False

(True/False) Arranging a sales history by day of the week facilitates identification of sales trends for an overall operating period

Sales histories

In the restaurant business, sales forecasts are prepared on the basis of:

both are correct

In the restaurant business, a sales history is: 

1. the basis for sales forecasting 

2. a daily summary of portion sales 

3. both are correct. 

Both are correct

Sales histories can be used to predict: 

1. portion sales for a given menu item 

2. total covers for a given day 

3. both are correct. 

88 portions

In a nearby restaurant, the popularity index for steak is 22%. The volume forecast for next Thursday is 400 covers, so the forecast for steak sales should be:

30%

In a nearby restaurant, steak accounted for 72 of the 240 items sold last Wednesday. Popularity index for steak for that day is: 

Closing inventory

Physical inventory at the end of a period, expressed in terms of units, value, or both

Intraunit transfer

Food or beverage transfer between departments in a single hotel, restaurant, or same establishment

Interunit transfer

Food or beverage transfer between units in a chain

Grease sales

Dollar value of fats and oils sold to rendering companies

Cost of food issued

opening inventory + purchases = total available

total available - closing inventory = cost of food issued

Methods of valuing physical inventory

-Actual purchase price

-First In, First Out (latest prices)

-Weighted average purchase price

-Latest purchase price (most recent prices)

-Last in, first out (earliest prices)

Actual purchase price

In this method, items are marked with the actual price that particular item can cost. Then when valuing inventory, the can values can be added

First In, First Out

This method is based on the idea that proper rotation was completed, and the FIFO method was used

Weighted average purchase price

In this method we assume the proper method was not used, and the actual cost of each item was not calculated (Total Value/Number of Units)

Latest purchase price

This method uses the latest purchase price under the premise, if you had to replace all cans, it would be at the last price

Last In, First Out

In the event that tax rates are high, some companies may try to reduce profits on financial statements by using this method

Cost percent

Cost / Sales

Food Cost Percent

Cost of food sold / Food sales

Total Inventory

Opening Inventory + Closing Inventory

Average Inventory

Total Inventory / 2

Inventory Turnover

Food cost / Average Inventory

Determining cost of employee meals

-Cost of separate issues (separate menu than guests)

-Prescribed amount per meal per employee (ex. $1.50 for breakfast)

-Prescribed amount per period (ex. $100 for Monday lunch)

-Sales value multiplied by cost percent (Receipts kept separately)

Determining Cost of Food Sold

Opening inventory + Purchases = Total available for sale

total available for sale - closing inventory = cost of food issued

cost of food issued + cooking liquor - transfers from other units = subtotal

subtotal - food to bar - transfers to other units - grease sales - steward sales - gratis to bar - promotion expense = cost of food consumed

cost of food consumed - cost of employee meals = cost of food sold

Inventory turnover ratio

Measures the number of times on average that the inventory is sold during that period In

Inventory turnover

Cost of goods sold / average inventory

Average inventory

(Beginning inventory + ending inventory) / 2

False

(True/False) Food cost percent equals food sales divided by food cost

False

(True/False) Closing inventory for a given period is equal to opening inventory for the previous period

True

(true/false) Average inventory is the sum of opening and closing inventory divided by 2

Actual purchase price

If the purchase prices of units in an inventory are marked on each unit, the most accurate method of determining the value of the closing inventory is:  

Employee meals

The difference between Cost of Food Consumed and Cost of Food Sold is: 

3.0

If average inventory is $12,000, food sales are $90,000, and cost of food sold is $36,000, then inventory turnover rate is: