Chapter 2 Determining Food And Beverage Standards

Standards cost and cost tools 

.In performing an excellent cost control, it is crucial for us to understand all the elements of costs used in hospitality organization

• COST – expense to a foodservice establishments for goods or services when the goods are consumed or service are rendered.

• The cost of labor (people on duty)- value per hour or value per week

• The cost of any item (meat) – value per piece, per gm or per individual portion.

• The cost of drinks (liquor) – value per bottle, per drink, or per ounce. 



Material cost is the cost of purchase/plus all costs incurred in getting the raw materials to the restaurant example, rice, vegetables and other food costs


Formula:
Opening stock
+ Cost of purchases     
- Closing stock 
-Cost of staff meals 
= Material cost

A labour cost is the cost of labour that can be traced directly to the manufactured goods.



Fixed costs 
• Unaffected by changes in sales volume 
• Rent, rates, insurance, repair maintenance, occupancy costs 

Semi- fixed costs 
• Contain a fixed and variable costs that not indirect proportion to sales volume.  • Charges for telephone service depend on the number phone calls made. 
• fuel costs and laundry 

Variable costs 
• Clearly related to the business volume 
• Ingredients for food and beverage, labor cost 




Elements of costs
Controllable Cost 
• Costs that can be changed in the short term 
• Costs that can be increased or decreased in the short term in the short term (example: part time hiring)  Non controllable cost 
• Costs that are usually fixed costs and managers do not have the ability to change it 

The relationship between costs and sales, 
Cost/ Sales = Cost % Cost / Cost % = Sales Sales x Cost % = Cost

This formula can be extended to show the following relationships,
Food cost/ Food sales = food cost % Beverage cost/ Beverage sales = Beverage cost % Labor cost/ total sales = labor cost %




Standard purchase specifications

Standard purchase specification are concise description of:
1. Quality
2. Size
3. Weight
4. Count factor desired for a particular item, 
Specification buying will give uniformity and consistency to purchasing and receiving that will aid to maintain a desire food cost and create standard product.

Objectives:
a) To establish a suitable buying standard for particular commodity for the hotel. b) To furnish the supplier in writing in specific term the requirement of the hotel.
c) To help in setting the price of a commodity.
d) To obtain a standard product material for Food & Beverage dept.
e) To obtain a standard product so that measurement of performance of departments can be accurate.




This percentage is calculated by dividing the portion able weight by the original weight of the purchase unit before processing.

QUANTITY = Number of portions x Portion size (as a decimal)  Yield percentage

NUMBER OF PORTIONS = Quantity x yield percentage Portion size

PORTION SIZE = Quantity x yield percentage Number of portions   YIELD

PERCENTAGE = Number of portions x portion size   Quantity (original weight)

Standard Portion Cost 

 There are several methods for calculating standard portion cost: 

i)  Formula 

ii) Recipe detail and cost card 

iii) Butcher test 

iv) Cooking Loss Test  

.For a large number of items, one may determine portion cost by means of this 

FORMULA: Standard portion cost

 =     Purchase price per unit      Number of portions per unit 

 =   RM41.40 purchase price per case     

  180 standard portions per case  =     

   RM0.23 

. For menu items produced from standard recipes, it is possible to determine the standard cost of one portion by using form name Recipe Detail and Cost Card.

. For inexpensive ingredients used in small quantities such as 1 tbsp of salt, it may not worthwhile to calculate the actual value.

 Yield percentage 

This percentage is calculated by dividing the portionable weight by the original weight of the purchase unit before processing. 

Quantity = Number of portions X Portion size (as a decmal) 

                                Yield percentage 

  

 

 

As with any formula, it is possible to solve for any one of terms, provided the other three are known. Thus, given quantity, portion size and yield factor, one could determine the number of standard portions that should be produced from the given quantity.

Number of portions = Quantity X Yield percentage 

                           Portion size  

 

Portion size  = Quantity X Yield percentage 

                          Number of portions 

 

Yield percentage = Number of portions X Portion size 

                          Quantity