1management function that deals with performance measurement and guidance towards established goals
Controlling
2process of making actual costs conform to standard
Cost Control
3use of management devices to reduce cost
Cost Reduction
4prices paid for or the value of the considerations given to acquire resources or
services
Costs
5remain constant despite increases or decreases in sales volume, such as rent.
Fixed costs
6increase when sales volume increases and decrease when sales volume decreases; an example is food cost
Variable costs
7are those costs over which a manager has control
Controllable costs
8are those that a manager cannot control
Noncontrollable costs
9are those that are easily attributed to a specific area of an operation
Direct costs
10also called overhead costs
Indirect costs
11are not easily attributable to a specific area
Indirect costs
12expired, consumed, utilized cost
Expenses
13calculated/ planned revenue and cost figures
Budget
14It is the overall financial budget, which includes the operating and capital budgets
Master Budget
15It is a forecast of revenue (sales), expenses, and profit for a specified period of time or fiscal year
Operating Budget
16It is a long-term plan prepared to estimate or predict the costs of capital outlays or expenditures and their financing. This includes capital expenditures include equipment replacement, renovation projects, and facility expansion.
Capital Budgets
17A _____ budget is a set dollar amount based on a set, predetermined level of
activity or transactions. It is quite rigid and common in institutions needing a tight budget.
Fixed Budget
18Budget that gives a dollar range for low to high levels of predicted activity. However, it is more difficult to use as a control tool
Flexible Budget
19The purpose of this budget is to determine if funds will be available when needed in order to meet the financial obligations or demands of the operation.
Cash Budgets
20This approach requires that the manager prepare a budget for each activity of the department, thereby forcing the manager to evaluate all activities each year and justify every request for funds.
Zero-based Budgets
21_______ budgets are commonly used for large capital requests such as equipment and renovation projects.
Zero-based
22Service oriented
Financial Goal:
Mark-up Factor:
Service oriented
Financial Goal: 60%
Mark-up Factor: 1.67
23Government hospital, schools
Financial Goal:
Mark-up Factor:
Financial Goal: 50%
Mark-up Factor: 2.00
24Fast foods, cafeteria
Financial Goal:
Mark-up Factor:
Financial Goal: 40%
Mark-up Factor: 2.5%
25Profit oriented
Financial Goal:
Mark-up Factor:
Financial Goal: 33%
Mark-up Factor: 3
26Hotel, restaurants
Financial Goal:
Mark-up Factor:
Financial Goal: 25%
Mark-up Factor: 4
27Catering functions
Financial Goal:
Mark-up Factor:
Financial Goal: 20%
Mark-up Factor: 5
28What are the three wats to determine food cost percentage?
1. By adding “direct to kitchen purchases” to “storeroom issuances”
2. By Food Inventories and Purchases
3. By Production Amounts
29The market is ever changing, and the buyer must keep abreast of new developments and learn what best suits the needs of the foodservice and at the most advantageous price.
Purchasing method
30This task may be entrusted to an assistant, but should be done by someone with managerial authority.
Receiving practices
31Protection of the company’s large investment of money in the food after it is purchased and received contributes greatly to overall cost control
Storage and Storeroom Control
32Foodservice managers are well aware of the many costs and potential losses that can occur in the production of food for service
Food Production: Preparation, Cooking, and Leftovers Control
33The size of a portion or serving to be offered to the consumer is a management decision and must be communicated in writing to the employees
Portion Size and Serving Wastes
34is the first and, perhaps, the most important step in the control of food costs
Meny Planning
35The ____ determines what and how many foods must be purchased and prepared.
Menu
36If a widely diversified selection is offered, the investment of too large a sum in food or labor for its preparation can result. Also, it may result in carrying an extensive inventory of small quantities of food items, or of foods infrequently used.
Canvassing of prices before purchasing
37What are the ways to control food cost? (8)
1. Careful menu planning
2. Canvassing of prices before purchasing
3. Checking of goods received
4. Practicing FIFO
5. Close supervision of preparation and production techniques using standardized recipes
6. Close supervision of delivery and service of food
7. Control of employees’ meals and subsidies
8. Accurate costing of standardized recipes with pricing of menu items based on agreed financial structure or goals