Chapter 10 - Actual versus standard food costs. After reading this chapter, you should be able to: Define standard cost and explain how it is calculated, describe how to use a Menu Pre - Cost and Abstract form, list three ways an undesirable forecasted food cost percentage could be changed, define potential savings and list several conditions that affect it, distinguish between daily and periodic calculation of standard cost and potential savings. | Principles of Food, Beverage, and Labor Cost Controls, Ninth Edition Cost: Determined by formula, recipe detail and cost card, butcher test, and/or cooking loss test Sales price (.): Menu sales prices Food cost percent (. %): Cost ÷ Sales price Total cost: Number forecast × Cost Total sales: Number forecast × Sales price Changing sales prices Altering portion standards (sizes, ingredients, and/or recipes) Adding or eliminating menu items To see if a menu item has sold in greater quantities than forecasted To determine the extent to which forecasts are wrong To see the extent to which forecasting techniques can be improved Actual cost percent: Ratio of actual cost of sales to total sales for a given period Potential savings: Difference between actual and standard costs Standard cost percent: Ratio of standard cost to actual dollar sales for a given period Over purchasing Overproduction Pilferage Spoilage Improper portioning Failure to follow standard recipes © John Wiley & Sons, | Principles of Food, Beverage, and Labor Cost Controls, Ninth Edition Cost: Determined by formula, recipe detail and cost card, butcher test, and/or cooking loss test Sales price (.): Menu sales prices Food cost percent (. %): Cost ÷ Sales price Total cost: Number forecast × Cost Total sales: Number forecast × Sales price Changing sales prices Altering portion standards (sizes, ingredients, and/or recipes) Adding or eliminating menu items To see if a menu item has sold in greater quantities than forecasted To determine the extent to which forecasts are wrong To see the extent to which forecasting techniques can be improved Actual cost percent: Ratio of actual cost of sales to total sales for a given period Potential savings: Difference between actual and standard costs Standard cost percent: Ratio of standard cost to actual dollar sales for a given period Over purchasing Overproduction Pilferage Spoilage Improper portioning Failure to follow standard recipes © John Wiley & Sons, Inc. 2009 | Principles of Food, Beverage, and Labor Cost Controls, Ninth Edition Cost: Determined by formula, recipe detail and cost card, butcher test, and/or cooking loss test Sales price (.): Menu sales prices Food cost percent (. %): Cost ÷ Sales price Total cost: Number forecast × Cost Total sales: Number forecast × Sales price Changing sales prices Altering portion standards (sizes, ingredients, and/or recipes) Adding or eliminating menu items To see if a menu item has sold in greater quantities than forecasted To determine the extent to which forecasts are wrong To see the extent to which forecasting techniques can be improved Actual cost percent: Ratio of actual cost of sales to total sales for a given period Potential savings: Difference between actual and standard costs Standard cost percent: Ratio of standard cost to actual dollar sales for a given period Over purchasing Overproduction Pilferage Spoilage Improper portioning Failure to follow standard recipes © John Wiley & Sons, Inc. 2009
