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Chapter 2
Definitions
| Term | Definition |
|---|---|
| Break even point | Minimum amount of sales an establishment must generate in sales to cover all costs |
| Budget | A plan that indicates an operations financial objectives or financial standards |
| Budgeting process | The way managers go about developing a budget. |
| Capitol expenditure budget | Allows an establishment to plan for the replacement of high cost equipment that wears out, and to purchase new types of equipment that may come on the market |
| controllable profit | primarily indicator of a managers effectiveness in meeting operational and financial standards |
| Cost of sales | Cost of the food and beverage products to a given operation |
| Fixed budget | Based on certain level of sales revenue |
| Flexible budget | Also known as variable budget, is prepped based on several levels of sales activity |
| Forecasting | Integral part of the planning process, but also one of the most difficult for managers |
| Income statement | Reports an operation's sales, expenses, and profits or losses for a period of time, such a month, a quarter or a year. |
| Long term budget | Plans from one year to 5 years in the future |
| Operating budget | A formal one-year operations plan to achieve the financial goals of an organization |
| Percentage of sales method | Estimating expenses for a future period as a percentage of the sales forecast |
| Return on investment | Profit resulting from specific investments made in the operation |
| Sales forecast | Process of using historical information nod knowledge to predict future sales |
| Short term budget | Strategic plans that usually influence day-to-day operation of the business |
| Shrinkage | Some of the weight of the meat will decrease during cooking or trimming |
| Simple markup method | Based on expenses being increased by a predetermined amount, normally a percentage of last years expense. |
| Utilization factor | Percentage of an amount of a food item served to a guest |
| Variance | Difference between the budgeted amount and the actual result |
Created by:
Og_nenaa
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