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Food Costs, terms

Study Guide

QuestionAnswer
What is the definition of a CONTROL when referring to Food Cost? Method of exercising some power over events or situations to achieve a particular result.
What is the definition of STANDARD when referring to Food Cost? Measure that is established to compare levels of attainment for goal or adequacy.
Definition: Controllable costs Costs that management can directly control
Definition: Noncontrollable costs Costs over which management has little or no control
Definition: Fixed costs Costs that remain the same regardless of sales volume
Definition: Variable costs Costs that increase or decrease in direct proportion to sales
Definition: Semivariable costs Costs that increase and decrease with sales but not in direct proportion to sales
What are Prime Costs? Food cost and Labor cost
Definition: Corrective Action Action taken to correct a problem
Definition: Sales Money restaurant takes in for food
What is: Cost of food sold Money spent on food
What is the formuala to figure the cost of food sold? Opening inventory plus purchases Minus ending inventory
Definition: Gross profit Money made on cost of food sold
What is the formuala to arrive at the Gross Profit? Subtracting cost of food sold from sales
Definition: Labor Expense Payroll for hourly employees and salaried management
What expenses are included in the Labor Expense? Hourly wage or salary, FICA and medicare contributions, plus benefits.
Definition: Total Expenses Labor, controllable costs, and noncontrollable expenses
Definition: Profit Money remaining after all expenses are paid.
What is the formuala used to figure the profit? Subtract total expenses from gross profit
Definition: Loss Money lost when expenses are greater than sales.
Definition: Income Statement Report showing sales, costs, and profit or loss of a business.
Definition: Line Item Review Comparison of forecasted budget to actual figures
What is another name for the Profit and Loss Statement? An Income Statement
Definition: Closing Inventory Physical inventory at the end of a given period.
Definition: Food Cost Actual dollar value of food used by an operation during a period.
Definition: Food Cost Percentage Relationship between sales and the cost spent on food to achieve the sales.
Definition: Inventory Dollar value of the food product on hand.
Definition: Opening Inventory Physical inventory at the beginning of a given period.
Definition: Purchases Product received to add to inventory.
Definition: Total Food Available Opening inventory plus purchases
What is a Pro forma income statement? Estimated income statement prepared before the fact.
What does AP mean? As purchased
What does EP mean? Edible portion
What is a Conversion Chart? Shows expected, or average, shrinkage from AP to EP
What is a Cooking loss test? Measures amount of shrinkage during cooking or roasting
What is the Edible Portion (EP) method? Method of costing ingredients based on trimmed (net) weight.
Define: Portion Size Exact size of one serving or portion.
What is a Recipe cost card? Tool used to calculate standard portion cost
What is Shrinkage? Amount of loss due to trimming, cooking, or roasting.
What is a Standard portion cost? Exact amount one serving should cost if prepared to standardized recipe.
What is a Standardized recipe? A receipe that sets the standard of preparing a menu dish.
What is a Butcher Test? Measures amount of shrinkage that occurs after meat is trimmed
What is the AP purchased (AP) method? Method of costing ingredients based on purchase price before trimming.
What is the Composite food cost percentage? Weighted average food cost for all items sold.
Define: Factor method Pricing formula for selling price based on standard food cost percentage and a calculated factor.
Define: Markup Difference between actual cost to produce an item and menu price.
Define: Markup differentiation Different markups on different categories of food based on market expectations.
What is the Markup on cost method? Pricing formula for selling price based on item cost and standard food cost percentage.
Define: Menu engineering Analyzing menu product mix and item's contribution to margin and popularity.
Define: Menu product mix Detailed analysis showing quantities sold of each item, selling price, and standard portion costs.
Define: Price-value relationship? Customer's perception between selling price and value
What is the abbreviation for Texas Restaurant Association Markup Method? TRA
Define: TRA Menu pricing Calculation Method that factors sales, costs, and profit.
Define: As Served After cooking, the Edible Portion is termed AS SERVED
What is a Buyer? Person assigned to purchase products
What is a Commissary? Central point of purchasing that consolidates orders from individual units into one purchase order.
What is are Competitive quotes? Purchasing method common to smaller operations requesting price quotes from 2 or more suppliers on a product.
What is Cost-plus? Central purchasing method used by large operations to buy product at a percentage above invoice cost for distribution to outlets.
What is an Invoice? Bill charging for goods delivered by a supplier.
What is a Market quotation sheet? Form listing items and item specifications submitted to purveyors for a price quote.
What are Nonperishable goods? Products with a long shelf life, such as coffee and canned goods.
What is a One-stop shop? A Supplier who is able to supply most items used by an operation.
What is Par stock? Level of inventory that must be in stock from one delivery to the next.
What are Perishable goods? Products that have a short shelf life, usually 1 to 3 days.
What is a Purchase Order? Form listing products to be purchased.
What are Quotes? Prices provided by a purveyor for a specific product.
What is a Sealed bid? Purchasing method used by large foodservice units calling for bids of a specific product to be supplied over a stated time period.
What is a Specification? Document listing characteristics of a product related to grade, size, and intended use.
What is a Standing order? Purchasing method that requires supplier to regularly monitor shelf stock and bring it up to par level.
What is a Yield chart? Register of products that compares EP to AP measure.
What is a Yield percentage? EP weight divided by AP weight.
What is a Yield test? Analysis done to determine difference between product's AP weight and EP weight.
What is the Actual price method? Method of valuing inventory based on the Actual price paid for an item.
What is the Averaged price method? Method of valuing inventory based on an average of purchase price for items.
Daily Food Cost Estimate of cost based on inventory movement and food sold.
What is Extending? Multiplying items of physical inventory by their cost and extending totals.
What is the FIFO method? Inventory control and pricing method. Uses first in first out stock rotation. Uses last purchase price to value inventory.
What is an Inventory? An itemized list of goods on hand and their dollar value.
What is an Inventory breakdown? Method used to categorize an operation's food and supplies.
What is Inventory turnover? A measure of how quickly an item in inventory is used.
What is Issuing? Process of taking stock items from storage.
What is the Latest Price Method? Method of valuing inventory based on the latest price paid.
LIFO method Inventory control and pricing method. Uses last in first out stock rotation. Uses first purchase price to value inventory.
What is Padding? Illegal, unethical, and inappropriate additon of nonexistent items to an inventory.
What is a Perpetual Inventory? A theoretical count of goods on hand.
What is a Physical inventory? An actual physical count of items on hand and their their dollar value.
What is a Requisition? A form used by large operations containing information about items needed and used to request stock from the storeroom.
What is Time and Temperature Control? Procedure of following policies to monitor time and temperatue of food flow through the operation.
What is a Transfer? A form used to track items going from one foodservice unit to another.
What is a Conversion Factor? Multiplier used to adjust quantity of ingredients to reach a desired yield from a recipe.
What is a Food Production Chart? Form showing how much product should be produced during a given meal period.
What is Recipe Conversion? Method used to change original yield of recipe to a desired yield.
What is a Recipe Yield? Process of determining number of portions a recipe will produce.
What is a Taste Test? Tastings done prior to a meal period.
What is a Waste Report? Report used to track food wasted and reasons for waste.
What is Portion Control? Amount of food in a serving as determined by standarized recipe.
What is a Portion Contol Device? Implements such as scoops and serving dishes that assist in portioning of food items.
What is a Preportioned Item? Item of food that is measured or weighed before going to service line.
Define: Plate Presentation How a food item appears when it is served.
What is a Product Usage Report? Report showing number of items issued to line, number returned to stock, and number sold to customers.
What is a Duplicate Guest-Check System? Control system using written records of what guests purchased and how much they were charged.
What is a Point-of-Sale (POS) control system? Control system using computer to ensure food items leaving kitchen are sold.
What is a Cash Handling Procedure? Procedures followed in an operation to ensure that all purchases are accurate and accounted for.
What is a Bank in relation to a Cash Handling Procedure? Money in coins and bills sufficient to make change for customers.
What is a Daily Sales Report? Report showing sales, cash, and carges collected as well as money over or short.
What is a Cash Report? Form completed by cashier showing all money, checks, and charges collected during a shirt.
What is Labor Cost? Payroll cost plus all other costs related to compensation, such as FICA and Medicare contribution, worker's compensation insurance, etc.
What is the Federal Insurance Contributions Act? A program for retirement and medical benefits paid for by employers and employees.
What is the abbreviation for the Federal Insurance Contributions Act? FICA
Who administers FICA? The federal government.
What is Medicare? A fund set aside for health benefits for those who cannot afford them.
FICA and Medicare contributions are added together and deducted from the employee's wages. True or False? True
Each pay period, the employer and employee pay equal contributions to FICA and Medicare. True or False? True
What are Employee Benefits? Benefits given by employer to employee that have monetary value but do not affect basic wage.
What is Labor Cost Percent? Relationship between Labor Cost and Business Volume.
What is a Budget? A projection of sales, costs, and profit to guide operational decisions.
What are Payroll Dollars? Number of dollars available for payroll during a period.
What is a Master Schedule? Template showing number of people needed in each position to run the operation.
Define: Covers Per Server Number of customer meals a waitperson can serve in an hour.
What is a Crew Schedule? Chart showing employees' names and days and times scheduled to work.
Define: Employee Turnover Number of employees hired to fill one position in a year's time
Define: Overtime Amount of time over forty hours a nonmanagement employee works in a week.
What is the rate of overtime pay mandated by federal law and most state laws? One-and-one-half times the regular hourly rate.
What is a Labor Contract? An agreement between management and a union representing employees regarding wages, benefits, hours, and working conditions.
What is a Quality Standard? Level of excellence used to measure customer satisfaction.
What is a Productivity Standard? Level set by management to measure amount of work performed by employee.
Define: Job Description Statement that details an employee's duties and expected standard of performance.
What is a Return Chart? Chart to track reasons a customer returned an item to the kitchen.
The Waste Report and the Return Chart may be recorded on the same chart. True of False? True. Management sets the policy on tracking these items.
Define: Person-hours Total hours worked by hourly employees for a given period.
Created by: kalimu12