CHAPTER 2: DETERMINUNG FOOD AND BEVERAGES

CHAPTER 2: DETERMINING  FOOD AND BEVERAGE STANDARDS

     -     It is crucial for us to understand all the elements of costs used in hospitality organization to perform an excellent cost control

STANDARD COST AND COST TOOLS

     -     COST: Expense to a foodservice establishment  for goods or services when the goods are consumed  or service are rendered.

             

          LABOUR COST:  Value per hour or value per week

      -        ANY ITEM COST (MEAT) : value per piece, per gram, or per individual portion.

      -        COSTS OF DRINKS (LIQUOR): value per bottle, per drink, or per ounce.

MATERIAL COST

      -     The cost of purchase and all costs incurred in getting  the raw materials to the restaurant

-          E.g. =rice ,vegetables and other food costs

MATERIAL COST = Opening Stock + Cost of purchase – Closing stock – Cost of staff meals

LABOR COSTS

       -       The cost of labour that can be traced directly to the manufactured goods.

     -    Wages and salaries paid to all employees plus any employer contribution to government taxes,  bonuses, meals and pension fund.

-          Eg: Wages paid to F&B employees and cooks.

OVERHEAD

       -   INDIRECT MATERIALS: Materials used to support the production process. Eg: lubricants and cleaning supplies used in the kitchen.

         -   INDIRECT LABOR: Wages paid to employees who are not directly involved in production work. Eg: Maintenance workers, janitors and security guards.

      -  COST REALTED TO THE MANUFACTURING FACILITY: Cost related to the production facility. Eg: Property taxes, utilities, depreciation, insurance and repairs.

*Fixed Costs: Unaffected by changes in sales volume. Eg: rent, rates, insurance, repair maintenance and occupancy costs.

*Semi-fixed cost: Contain a fixed and variable costs that not indirect proportion to sales volume. Eg: Charges for telephone service depend on the number phone calls made, fuel costs and laundry.

*Variable costs: Clearly rated to the business volume. Eg: Ingredients for food and beverage, labor cost.

TOTAL COST = Fixed costs + semi-fixed cost + Variable cost

ELEMENTS OF COSTS

Controllable Cost: Costs that can be changed (increased or decreased) in the short term. Eg: part time hiring

Non-controllable Cost: Cost that are usually fixed costs and managers do not have the ability to change it.

      ·         Cost / Sales = Cost%

      ·        Cost / Cost% = Sales

      ·         Sales x Cost% = Cost

STANDARD PURCHASE SPECIFICATIONS

      -       Objective: to establish a suitable buying standard for particular commodity for the hotel.