CHAPTER 1: INTRODUCTION TO COST CONTROL

introduction to cost control

assalamualaikum. this semester, we get to learn a subject which is quite important to us called cost control. the main importance of this subject is to teach us how to control the costing of everything in the industry to prevent loss and wastage. for chapter 1, we get to learn a topic which is the introduction of cost control.

what is cost control?

cost control is a process or activity on controlling cost associated with an activity, process, or company. it includes  investigative procedure to detect actual cost from budgeted cost.

1. Food and beverage managers in control

- Food & Beverage Manager forecasts, plans and controls the ordering of food and beverages for a hospitality property.

- Manages the finances related to the whole process of purchasing food and drink for the hotel premises.

- The F&B Manager may or may not have staff under his authority. 

- Managing business, people, skill and operation

2. Management resource and objectives

- Planing: Setting objectives, Decision making and formulating policies

- Organizing: Analyzing tasks and assigning them to individuals

- Motivating: Helping and encourage staff

- Controlling: observing, analyzing accounting records & reports

3. Profit and cost centers

- A profit center is a sub unit of a company that is responsible for revenues and costs. 

- A cost center is a sub unit of a company that is responsible only for its costs.

4. Definition and importance of control

- It's a process used by manager to direct, regulate and restrain the action of people so that the established goals of the business can be achieved.

- Process used by managers to regulate cost and guard against excessive costs.

- The main objective is to eliminate the cost for food beverage and labor to gain more profit.

5. Steps in the control

1. Establishing standards

2. Establishing procedures

3. Training

4. Setting examples

5. Observing and correcting employee acions

6. Requiring records and reports

7. disciplining employee

8. Preparing and following budgets

6. Establishing standards

Standard can be set on the basis of:

- Profitability standards

- Market position standards

- Productivity standards

- Employee attitude standards

- Social responsibility standards

- Short change goal

those are what we have learnt so far. stay tune for more knowledge in cost control!