Actual Versus Standard Food Costs

Chapter 10Actual Versus Standard Food CostsPrinciples of Food, Beverage, and Labor Cost Controls, Ninth EditionCost: Determined by formula, recipe detail and cost card, butcher test, and/or cooking loss testSales price (S.P.): Menu sales pricesFood cost percent (F.C. %): Cost ÷ Sales priceTotal cost: Number forecast × CostTotal sales: Number forecast × Sales priceDetermining Quantities on the Menu Pre-Cost and Abstract Changing sales pricesAltering portion standards (sizes, ingredients, and/or recipes)Adding or eliminating menu itemsThree Ways an Undesirable Forecasted Food Cost % Can Be Changed To see if a menu item has sold in greater quantities than forecastedTo determine the extent to which forecasts are wrongTo see the extent to which forecasting techniques can be improvedThree Reasons for Comparing Forecast and Actual FiguresActual cost percent: Ratio of actual cost of sales to total sales for a given periodPotential savings: Difference between actual and standard costsStandard cost percent: Ratio of standard cost to actual dollar sales for a given periodImportant Chapter Terms Over purchasingOverproductionPilferageSpoilageImproper portioningFailure to follow standard recipesReasons for Differences Between Standard and Actual Costs © John Wiley & Sons, Inc. 2009