CHAPTER 8: CALCULATING FOOD AND BEVERAGE CONTROL

heyaa! this might be the second last entry for hospitality cost control. because there are only 9 chapters in this subject. its sad that its coming to an end. but hey, one more chapter to go. until then, lets get to chapter 8.

Cost of sales and calculating cost of sales

• All foods can be categorized as either directs or stores in food control, the total costs for these two are the two basic components of the daily food cost.

- Cost of directs (directs are charged to food cost as received)

- Cost of stores ( added to inventory and charged to the food cost when issued)

• TRANSFERS

- Transfer between kitchen and the bar (Intra unit transfers)
- transfers of alcoholic beverages from bar to kitchen, used in food preparation.
- The term “cooking liquor” is commonly used. Charged to food cost.
- Transfer of directs from kitchen to bar, where they will be used in drink preparation.
- The term “ food to bar” (directs) is often used for these items.

• Steward Sales

- In some establishments, primarily large hotels and motels and a very few restaurants- employees may be permitted to purchase food at cost and take it from the premises for their own personal use.

- Similar to reimbursement

• Gratis to bars

- The kitchen  staff is expected to produce various hot and cold hors d’ oeuvres that are given free to customers at the bar.

• Promotion expenses

- Sales personnel invite potential customers to have luncheon/ include entertainment cost.

- Purpose: promote sales

• Determining cost of food sold:

        Opening inventory

+      Purchases                          

= Total available for sale

        Closing inventory              

= Cost of food issued

+ Cooking liquor

+ Transfers from other units

        Food to bar

        Transfers to other units

        Steward sales

        Gratis to bars

        Promotion expense             

= Cost of food consumed

        Cost of employees’ meals   

= Cost of food sold                 

Daily food costs and calculating the daily food cost percent

- After determining daily food cost, the next step is to obtain a daily sales figure, usually from              accounting records. 

- When both food cost and food sales figures are known, a daily food cost can be determined. 

The food cost %=   Food cost (Cost of food sold)   

                               Food sales

                          =   Food cost %

• DAILY BEVERAGE COST

- A physical inventory of the storage area is taken after the close of business on the last day of the         month.

- The number of bottles of each item in stock is counted , and the value of each item is determined.

*Formula*

 Opening beverage inventory                         

+       Beverage purchases this month (all purchases) 

=       Total available for sale this month           

-        Closing beverage inventory              

         Cost of beverage issue                                   

-        Transfers from Bar           

+       Transfers to Bar                       

=        Cost of beverage sold                                       

remember, the formulas are the key to excel. during examination, make sure u memorize it. because as chef naim said, the formula might be or might not included . so, by memorizing all the formulas, we can excel during examination. thats all for todays entry. see you again in the final entry folks!