Food Service Cost Centers

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Questions and Answers

What percentage of the cost centers in Food Service is attributed to Labour Costs?

24%

25%

19%

32% (correct)

What is the formula to calculate the Cost of Food Sold?

Cost of opening stock + cost of purchases - cost of closing food stock - credit return - staff meals (correct)

Cost of opening stock + cost of purchases + cost of closing food stock

Cost of opening stock - cost of purchases - credit return - staff meals

Cost of opening stock - cost of purchases + cost of closing food stock + credit return

What is the purpose of 'Taste and place' in the steps of costing a recipe?

To adjust the portion size of the dish

To involve front of house staff in the testing process (correct)

To determine the production cost of the dish

To test the recipe on customers

What is the term for the costs associated with getting the plate of food to the customer, excluding normal kitchen costs?

Surround cost Signup and view all the answers

What is the formula to calculate the Total Cost of an item?

(Unit Cost/Unit of issue)*Quantity Signup and view all the answers

What is the process of selecting, costing, pricing, and evaluating menu items called?

Menu engineering Signup and view all the answers

Why is it important to use invoice prices when costing recipes?

To ensure accurate costing and accounting Signup and view all the answers

What is the purpose of calculating the value added tax?

To calculate the recommended selling price of the dish Signup and view all the answers

What is the term for the difference between the net sales and the cost of food sales?

Gross profit Signup and view all the answers

What is the purpose of revising, reviewing, and correcting the recipe during the costing process?

To ensure that the recipe is accurate and standardized Signup and view all the answers

What is the primary goal of categorizing menu items based on popularity and profitability?

To identify which dishes to feature on the menu Signup and view all the answers

What is the formula to calculate the selling price of a dish?

Food Cost x 100 / (Food cost %) Signup and view all the answers

What is the purpose of menu planning in a restaurant?

To outline the style of cooking and its impact on the kitchen design and financial outlay Signup and view all the answers

What is the rule of thumb for allocating space to the kitchen and associated stores?

1/3 of available space Signup and view all the answers

What is the ideal number of touches to a plate in a restaurant?

3-5 Signup and view all the answers

Why is it important to know your customers in menu planning?

To plan the menu according to their preferences Signup and view all the answers

What is the purpose of carrying out a detailed location analysis?

To evaluate the competition Signup and view all the answers

What should be considered when planning the menu to prevent waste?

Watch for uneaten garnishes and plan waste into the menu Signup and view all the answers

Why is accurate costing important in menu planning?

To lead to accurate pricing Signup and view all the answers

What should be included in the menu planning process?

The allergen information and supplier needs Signup and view all the answers

Study Notes

Cost Centers in Food Service

Net profit before taxes: 19%
Food Costs: 25% (food and drink)
Labour Costs: 32% (wages, salaries, pensions, staff meals)
Overheads: 24% (rent, insurance, maintenance, professional, printing/stationery)

Cost of Food Sold and Gross Profit

Cost of food sold = cost of opening stock + cost of purchases - cost of closing food stock - credit return - staff meals
Gross profit = net sales (net of VAT) - cost of food sales
Net profit = gross profit - labour and overhead costs

Steps in Costing a Recipe

Discuss whether a recipe suits your concept
Test the recipe, considering labor content, utility costs, and impact on front of house staff
Allow for wastage on all dishes
Revise, review, and correct the recipe as necessary
Photograph the dish for the kitchen manual
Write the recipe in standard format
Cost the recipe using current invoice prices
Calculate the selling price (net price) based on market forces
Calculate value-added tax/sales tax based on net price
Add value-added tax/sales tax to net price to get the recommended selling price

Selecting, costing, pricing, and evaluating menu items
Categorizing menu items based on popularity and profitability
Calculating cash contribution in food costing: take the cost of the dish and multiply by a factor to receive a certain margin
Selling price = Food Cost x 100 / (Food cost %)
Gross profit = Gross profit x 100 / (Selling price)
Food cost % = food costs x 100 / (Selling)

A badly planned menu creates multiple problems across the business
The menu impacts every other decision and the management of the operation
Consider the style of cooking, market, and kitchen size when planning the menu
Plan the menu to use ingredients across many dishes
Design side orders and accompaniments to be used across multiple dishes
Watch labor content and required skills/knowledge
Avoid creating bottlenecks in the menu
Aim for low input/high return menu items where possible
Keep in mind the optimum number of touches to the plate (3-5)
Menus can be planned to need a trained chef or competent cook
Know your area, customers, and local business environment
Carry out a detailed location analysis
Check competition
Design to prevent waste, avoid roasts, out-of-season ingredients, and uneaten garnishes
Plan waste into the menu
Ensure staff are trained to prepare food in a non-wasteful way
Offer a balance of dishes, including a signature dish
Include allergen information and consider supplier needs
Pricing strategy is influenced by many factors, including location, business model, competition, costs, and seasonal, local, healthy, ethnic, and plant-based considerations

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Description

This quiz covers the different categories of cost centers in the food service industry, including food costs, labour costs, and overheads. Learn how to calculate cost of food sold, gross profit, and net profit.