Controlling Costs
Terms
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- Define: Cost
- the expense to a foodservice establishment for goods or services when the goods are consumed or the services are rendered
- Define: Fixed Costs
- are costs that are normally unaffected by changes in sales volume.
- Define: Variable Costs
- are costs that are clearly related to the business volume.
- Define: Directly Variable Costs
- are costs that are directly linked to volume of business.
- Define: Labor Costs
- - also known as Payroll Costs - it includes salaries, wages and employee benefits
- Define: Semivariable Costs
- it is a cost that has both a fixed and variable element. Example: Payroll costs
- Define: Controllable Costs
- are costs that can be changed in the short term
- Define: Noncontrollable Costs
- are costs that cannot normally be changed in the short term.
- Define: Prime Costs
- the costs of materials and labor
- Define: Historical Costs
- a cost that can be found in business records, books of account, financial statement, invoices and employees times cards
- Define: Sales
- revenue resulting from the exchange of products and services for value.
- Define: Total dollar sales by category
- total food sales or total beverage sales, referring to the total dollar volume of sales for all items in one category
- Define: total sales per server
- is the total dollar volume of sales for which a given server has been responsible in a given timer period
- Define: Assets
- Items owned by business
- Define: Budget
- a projection; forecast; plan for the future; pre-cost concept
- Define: Break-even-point in Covers
- a determination of how many customers are needed to reach the break-even-point in
- Define: Sales Formula
- Break-even-point in sales divided by the ticket average
- Define: Break-even-point n sales
- when the totals sales are enough to pay for fixed and variable expenses resulting in a profit before income tax of zero(0)
- What is the formula for Break-even- point in sales?
- Fixed expenses $ divided by Contribution Margin %
- Define: Capital
- In the context of profit cycle it represents money they business receives from the customers.
- Define: Check Average
- the average amout of money a customer spends on food and liquor
- Define: Closing Inventory
- that amount of food or liquor products left in restaurant at the ends of a time period
- Define: Contribution Margin
- the amount of Total Sales left after the Total Variable Expenses are paid. It is the same as Profit Before Occupation Expenses
- Define: Cost Control
- The elimination of all expenses without sacrificing service or quality to the customer
- Define: Cost of Sale
- Cost to the restaurant for the raw material used out of inventory to produce sales
- Define: Cost per Portion
- Cost of the raw materials to produce a single menu item
- Define: Cover
- a term used to represent a singe restaurant customer
- Define: Daily Cash and Sales Report
- Accounting done by cashier to balance the differences between the cash, counted in the drawer, and the sales, recorded on the register tape.
- Define: Employee Meal Benefit
- A value used to determine FICA payments made by employee for food provided by the restaurant to them FREE of charge
- Define: Expenses
- Dollar amount of sales spent by the business
- Define: Fixed Expenses
- A group od expenses that do not, or should not fluctuate with the sales volume
- Define: Food to Liquor Ratio
- that percent of Total Sales brought in from selling food compared to that percent of Total Sales brought in from selling liquor
- Define: Government Required Benefits
- Mandatory employee protection consisting of FICA, Worker's Compensation, Disability and Unemployment Insurance
- Define: Gross Profit
- Amount of Total Sales left after subtracting the Total Cost of Sales
- Define: Guest Check
- A statement of how much a customer owes the restaurant for goods and services
- Define: Income Statement
- A tool used to summarize sales; expenses needed to produce those sales; and profits
- Define: Inventory Recap
- Method used to calculate the cost of sales of food and liquor
- Define: Issues
- Internal accounting of product between a store room and production area
- Define: Kitchen Dupe
- Duplicate copy of the guest chef used to communicate with the kitchen
- Define: Liabilities
- Assets at risk; any times assets are used without producing a profit.
- Define: Menu Abstract
- A type of budget compiled at the end of a period of time in order to project what the food cost and food cost % should have been
- Define: Menu Mix
- Accounting of how many of each menu items were sold
- Define: Occupational Expenses
- Area on an income statement used to account for fixed expenses
- Define: Opening Inventory
- Total amount of food or liquor products in the business at the beginning of a tie period
- Define: Operating Expenses
- That portion of variable expenses not included eatable products
- Define: Optional Benefits
- Those groupd of employees protection that are left to the discretion of the business
- Define: Payroll
- cost to the business to pay employees for their time on the job
- Define: Percentage
- a method of showing the relationship of a part of something to the whole
- Define: Pre-cost Concept
- Having an idea of what should happen
- Define: Prime Cost
- Total cost of sales plus total labor cost
- Define: productivity
- Term used to indicate or measure the output of an employee
- Define: Profit
- amount of sales left after the expenses are subtracted
- Define: Profit before Income Tax
- Amount of sales left after all fixed and varible expenses are paid. Most often referred to as the "bottom line"
- Define: Profit before Occupation Expenses
- Amount of statement used as a statement of fact
- Define: Purchasing
- The act of moving product from supplier to business
- Define: Requisitions
- Internal request of production area of the store room
- Define: Sales
- Money spent by the customer
- Define: Sales Journal
- Set of records maintained by a bookkeepers to record and accumulate sales information.
- Define: Sales Volume
- Repetition of the profit cycle
- Define: Selling price
- Dollar Value printed on the menu for each item
- Define: Transfers (in/out)
- Accounting of product being moved between food and liquor inventories
- Define: Ticket Average
- Average amount of money a single customer spends for food and liquor
- Define: Tip Credit
- Credit to the restaurant, allowed by the government, for paying minimum wage to tipped employees
- Define: Total Cost of Sales
- Addition of Cost of Sales of Food and Cost of Sales of Liquor
- Define: Total Labor Cost
- Addition of payroll and Employee Benefit costs
- Define: Total Sales
- Addition of Food and Liquor Sales
- Define: Total Variable Expenses
- Addition of Total Cost of Sales and Total Operating Expenses
- Define: Total Wages
- Addition of regular and overtime wages and Employee Meal Benefits
- Define: Variable Expenses
- Expenses that should fluctuate directly with the sales volume.
- Define: Vertical Analysis
- Accounting procedure used when there is a need to express the relationship of the various categories to the total. The relationships are show as percentages
- Define: Work schedule
- A posted listing of the hours each employee is assigned to work.
- Define: Contribution Formula
- Total sales - total variable expenses
- Define: P&L Statement
- Income statement used as a statement of fact