Chapter 8 - Monthly inventory and monthly food cost. The purposes of this chapter are to describe the procedures for determining monthly food cost and food cost percent, and to explain how these figures can be useful in assessing whether the operation is meeting its goals. To make these determinations, it is necessary to take several steps aimed at measuring performance. The first of these is taking physical inventory. | Principles of Food, Beverage, and Labor Cost Controls, Ninth Edition Closing inventory: Physical inventory at the end of a period, expressed in terms of units, value, or both Intraunit transfer: Food or beverage transfer between departments in a single hotel, restaurant, or similar establishment Interunit transfer: Food or beverage transfer between units in a chain Grease sales: Dollar value of fats and oils sold to rendering companies Actual purchase price First-in, first-out (latest prices) Weighted average purchase price Latest purchase price (most recent prices) Last-in, first-out (earliest prices) Cost ÷ Sales = Cost % Cost of food sold ÷ Food sales = Food cost % Total inventory = Opening inventory + Closing inventory Average inventory = Total inventory ÷ 2 Inventory turnover = Food cost ÷ Average inventory Cost of separate issues Prescribed amount per meal per employee Prescribed amount per period Sales value multiplied by cost percent Opening inventory + Purchases = Total . | Principles of Food, Beverage, and Labor Cost Controls, Ninth Edition Closing inventory: Physical inventory at the end of a period, expressed in terms of units, value, or both Intraunit transfer: Food or beverage transfer between departments in a single hotel, restaurant, or similar establishment Interunit transfer: Food or beverage transfer between units in a chain Grease sales: Dollar value of fats and oils sold to rendering companies Actual purchase price First-in, first-out (latest prices) Weighted average purchase price Latest purchase price (most recent prices) Last-in, first-out (earliest prices) Cost ÷ Sales = Cost % Cost of food sold ÷ Food sales = Food cost % Total inventory = Opening inventory + Closing inventory Average inventory = Total inventory ÷ 2 Inventory turnover = Food cost ÷ Average inventory Cost of separate issues Prescribed amount per meal per employee Prescribed amount per period Sales value multiplied by cost percent Opening inventory + Purchases = Total available for sale – Closing inventory = Cost of food issued + Cooking liquor + Transfers from other units = Subtotal – Food to bar (directs) – Transfers to other units – Grease sales – Steward sales – Gratis to bar(s) – Promotion expense = Cost of food consumed – Cost of employees’ meals = Cost of food sold © John Wiley & Sons, Inc. 2009
