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FoodService
Management Principles
| Question | Answer |
|---|---|
| Budget | A prediction of anticipated revenue and expenditures for a specific period of time |
| Cost | resources expended to achieve an objective |
| Types of Budgets | 1. Master 2. Operating 3. Cash Budgets 4. Capital Budgets |
| Food Cost/ meals serve | Food Cost per Meal Formula |
| Income/Meal equivalent | Meal Volume Formula |
| Food cost --------- x 100 Income | Food Cost percentage formula |
| Mark-up factor = _______100_______ % income for food Selling price = mark-up factor X raw food cost | Determining Selling Price formula |
| Mark-up factor =___ 100______ Food cost % Raw food cost X % hidden cost = hidden cost Raw food cost + hidden cost = adjusted food cost Selling price = mark-up factor X adjusted food cost | Conventional Method formula for determining selling price |
| Prime cost = raw food cost + labor cost* Mark-up factor = __100_____ (Food cost % + labor cost %) Selling price = prime cost X mark-up factor *Labor cost = Divide # min by 60, then multiply by $/hr. | Prime Cost Method for determining selling price |
| Fixed cost/1-(variable costs/sales) | Break even point formula |
| Multiply the # of employees by the # of hours worked per wk Add up all of the hrs Divide by 40 Example: A foodservice has ten 40-hr employees, 3 20-hr employees,& five 16-hr employees (10)(40)+(3)(20)+(5)(16) = 540 hrs 540/40=13.5 FT | Calculating FTE (full-time equivalent) per week |
| Total number of meals served/ Total hrs of labor to produce the meals | Meals per hour formula |
| Total number of meals served/ Total FTE's to produce the meals | Meals per full time equivalent formula |
| Total min of labor time to produce the meals/Total number of meals served | Labor minutes per meal formula |
| number of meals sold x sales average | Total revenue formula |
| Labor cost/total revenue | Labor cost percentage formula |
| What is a master budget? | 1. coordinates every aspect of operation 2. compilation of several small budgets (operating, cash, capital) |
| What is a operating budget? | forecast of revenue (sales), expenses; profit day to day guide includes: statistics budget-estimate of volume of sales in commercial services in non-commercial operations *based on historical data revenue budget-projection of the expected income |
| What is a cash budget? | 1. projects receipt of revenue & expenditure of funds 2. determine if funds are available when needed *identify cash availability at any given time |
| What is a capital budget? | long term plan, estimates/predicts cost of capital expenditures |
| Fixed Budget | Set dollar amount based on predetermined activity Based on past sales & cost, considers future change Rigid |
| Flexible Budget | Dollar range for levels of activity Takes into account variability in activities |
| Zero-based | Start with “blank piece of paper” each year Evaluate all activities, justify every request for funds |
| What are the five phases of budget planning continued? | Evaluation Phase: Dissects past performance, identifies factors influencing future activities Preparation or planning phase: Uses info from evaluation phase to forecast and prepare for 1st draft of budget |
| What are the five phases of budget planning? | 1. Evaluation phase 2. Preparation or planning phase 3. Justification phase 4. Implementation or execution phase 5. Control phase |
| What are the five phases of budget planning continued | Justification phase: Review, revise, give final approval on budget Implementation or execution phase: Translate budget expenditures into operation function Control phase: Ongoing monitoring process |
| Budget Write up | List sources of expected income Classify & list expenses w/ cost Food, labor, overhead, operating costs Other data # meals, labor hours, expected changes, new totals Justification for request of new funds Review, make changes Final form w/ justific |
| Records for Control | Purchasing & receiving, storage & storeroom control, production & service of food, cash transactions, operating & maintenance, and personnel |
| Service and Income and Expense Records | Service records: number served Used to collect and track demand Help to control & monitor cost to forecast future budget Income/Expense: Daily transactions Sources & amounts of income and where it goes |
| Ssles/Cash receipts Records | Sales/Cash receipts Cash registers, POS, Number of sales, total sales, tax, servings of types of foods |
| Daily food-cost Report | Prepared from 4 records Cash receipts record of total income Census record Storeroom issues Invoices of perishable foods Most valuable report - Info about sales, food cost, # served % income for food: food-cost percentage |
| Profit and loss Statement | Summary comparison of income to determine profit and loss for a given period Includes all expenses Prepared at end of calendar month Income (sales) Less: cost of food Equals: gross profit Less: labor, overhead, operating Equals: net profit, loss |
| Food-Cost % | Divide cost of food for the day by income of the day Food Cost: $530/Income: $1,280 = .414 X 100 = 41.4% Varies depending on type of organization, goals, characteristics and expenses Use cumulative figures for the month to determine average |
| Cost Control | Food Cost: most readily controlled item, subject to greatest fluctuation Menus: 1st & most important step in controlling food cost Determine what and how much food to purchase & prepare |
| Labor cost control | 50-70% of total food service expenses |
Created by:
surfinbird
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