Monthly Inventory and Monthly Food Cost

Chapter 8Monthly Inventory and Monthly Food CostPrinciples of Food, Beverage, and Labor Cost Controls, Ninth EditionClosing inventory: Physical inventory at the end of a period, expressed in terms of units, value, or bothIntraunit transfer: Food or beverage transfer between departments in a single hotel, restaurant, or similar establishmentInterunit transfer: Food or beverage transfer between units in a chainGrease sales: Dollar value of fats and oils sold to rendering companies Important Chapter Terms Actual purchase priceFirst-in, first-out (latest prices)Weighted average purchase priceLatest purchase price (most recent prices)Last-in, first-out (earliest prices) Five Methods of Valuing Physical Inventory Cost ÷ Sales = Cost %Cost of food sold ÷ Food sales = Food cost %Total inventory = Opening inventory + Closing inventoryAverage inventory = Total inventory ÷ 2Inventory turnover = Food cost ÷ Average inventory Important Chapter Formulas Cost of separate issuesPrescribed amount per meal per employeePrescribed amount per periodSales value multiplied by cost percent Techniques for Determining Cost of Employee Meals Determining Cost of Food Sold 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