how do i figure out the food cost and minthly food cost %? Opening Inventory = Purchases:
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how do i figure out the food cost and minthly food cost %?
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Opening Inventory = Purchases: $7,987.55 Closing Inventory: $3,999.65 Food Cost = Cash Sales: $18,776.09 Charges: $6,009.88 Promotions $744.00 Staff Meals: $1,421.33 Monthly Sales Total = Monthly food Cost%= Assignment 5: Calculate the Following: January: Opening Inventory: $4,276.96 Purchases: $9,551.33 Closing Inventory: $4,223.71 Food Cost = Cash Sales: $24,996.20 Charges: $5,979.08 Promotions: $990.44 Staff Meals: $1,886.32 Monthly Sales Total = Monthly food Cost % - February: Opening Inventory = Purchases: $ 8,003. 77 Closing Inventory: $5,233.96 Food Cost- Cash Sales: $18,001.22 Charges: $4,999.10 Promotions: $846.43 Staff Meals: $1,142.33 Monthly Sales Total = Monthly food Cost % - March: Opening Inventory = Purchases: $8,050.35 Closing Inventory: $4,989 88 Food Cost- Cash Sales: $23,004.44 Charges: $866.27 Promotions: $233.70 Staff Meals: $1,355.68 Monthly Sales Total = Monthly food Cost%= Inventory Control Inventory is conducted on a regular basis to ensure that the food cost percentage is maintained. Most food service establishments conduct an inventory once a month. Firstly, all stock must be counted. The stock in the kitchen, store room, freezers and refrigerators are included in this counting of inventory. When the counting is complete the almost endless task of determining the value of the stock is undertaken to establish a total value. This is called the closing inventory. The previous month s closing inventory is the new month s opening inventory. Next a calculation occurs to determine the food cost percentage using this or a similar format Opening inventory: $14, 302. 96 Purchases: $26, 242. 88 Closing inventory: $13,449.33. Food cost: $27,096.51 Cash sales: $58,002.76 Charges: $21, 545. 23 Promotions: $788.55 Staff meals: $1,250. 48 Total sales: $81, 587, 02 Food cost percentage = 33.21 % Let s analyze these statistics and see if we can make something out of them. We know that the previous month s closing inventory is this month s opening inventory. In other word this was what was in stock at the beginning of this month. The term purchases means the total amount spent on food that was brought in over the course of the month. As previously stated the closing inventory is the total value of what remained in stock at the end of the month. This figure must be subtracted from the total cost because we cannot be penalized for stock we have not yet had the opportunity to sell to our customers. It is not possible to operate a food service establishment without food in stock. However, this figure must be reasonable and is closely scrutinized to prevent over purchasing. Here, then are our calculations so far. Opening inventory + purchases - closing inventory = food cost $14 2.96+$26,242.88-$13,449.33 = $27,096.51 Now we research our sales figures. The cash sales and charges represent the 16 amount of money spent by our customers. Promotions are meals that have left our kitchen without actual payment. Two for one coupons, complimentary meals and expense account meals for owners and management may be classified as promotions. Although these meals are not paid for a signed credit must be given to the kitchen to avoid an increase in the food cost percentage. In the event the management of our establishment wishes to provide staff meals at a minimal cost or no cost at all requires additional credit to the kitchen. All food that leaves the kitchen must be paid for or credited to the correct accounts. Generally, no food whatsoever should leave the kitchen without a signed credit or guest check. A sound system for inter departmental transfers must also be in place so that the chef does not pay for other departments products and costs. Examples would be lemons and limes to the bar or lounge. Cash sales +charges + promotions + staff meals = food sales. $58,002.76+$21,545.23+ $788.55 +$1250.48 = $81,507.52 One last calculation: Food cost divided by food sales X 100 = food cost % $27,096.51 divided by 81,507.52 X 100 =33.21 % Let s look at another example: Opening inventory: $4,222. 85 Purchases: $18,001.25 Closing inventory: $4,799.66 Food cost: $17,424.44 Cash sales: $34,800.65 Charges: $25,555.30 Promotion: $ 1 006. 77 Staff meals: $2,119.33 Total sales: $63,482.25 Food cost divided by food sales X 100 = food cost % $17,424.65 divided by $63,482.25 X 100 = 27.45% Assignment 5: Calculate the Following: January: Opening Inventory: $4,276.96 Purchases: $9,551.33 Closing Inventory: $4,223.71 Food Cost = Cash Sales: $24,996.20 Charges: $5,979.08 Promotions: $990.44 Staff Meals: $1,886.32 Monthly Sales Total = Monthly food Cost % = February: Opening Inventory = Purchases: $ 8,003. 77 Closing Inventory: $5,233.96 Food Cost = Cash Sales: $18,001.22 Charges: $4,999.10 Promotions: $846.43 Staff Meals: $1,142.33 Monthly Sales Total = Monthly food Cost % = March: Opening Inventory = Purchases: $8,050.35 Closing Inventory: $4,989.88 Food Cost = Cash Sales: $23,004.44 Charges: $866.27 Promotions: $233.70 Staff Meals: $1,355.68 Monthly Sales Total = Monthly food Cost % = Opening Inventory = Purchases: $7,987.55 Closing Inventory: $3,999.65 Food Cost = Cash Sales: $18,776.09 Charges: $6,009.88 Promotions $744.00 Staff Meals: $1,421.33 Monthly Sales Total = Monthly food Cost %= Daily Kitchen Reports: As we just discovered a monthly inventory is a method of determining the food cost percentage. This method, although very helpful, does not serve the kitchen on a day to day basis. If problems occur with the food cost percentage in the early stages of the month they will not be discovered until it is, in all probability, too late to rectify. Consequently a wise chef would keep an up to date and accurate set of records in the kitchen. These records not only keep us well informed on the financial status of our kitchen they also may point out problems as they occur making their solving much more pro-active. Although these daily reports will not exactly pinpoint the exact cause of problems it will give the caterer a general idea as to where to look for the cause. Keeping a daily record of the food cost percentage also keeps the chef and his brigade out of the line up at the employment insurance office because if he or she were to rely solely on the results of a monthly inventory, they may be surprised at the results and the subsequent consequences! As stated earlier, every delivery is accompanied by an invoice. These invoices are collected at the end of the day or early the following day and recorded in the daily kitchen report under their particular categories. For every invoice there must be a separate listing on the report. The invoice sums are then tallied to determine the total cost in each category. The total of all categories are then added to establish the food cost for each particular day. The food sales figure for the day is then listed on the report. A simple calculation is made to determine the food cost % for that particular day: Opening Inventory = Purchases: $7,987.55 Closing Inventory: $3,999.65 Food Cost = Cash Sales: $18,776.09 Charges: $6,009.88 Promotions $744.00 Staff Meals: $1,421.33 Monthly Sales Total = Monthly food Cost%= Assignment 5: Calculate the Following: January: Opening Inventory: $4,276.96 Purchases: $9,551.33 Closing Inventory: $4,223.71 Food Cost = Cash Sales: $24,996.20 Charges: $5,979.08 Promotions: $990.44 Staff Meals: $1,886.32 Monthly Sales Total = Monthly food Cost % - February: Opening Inventory = Purchases: $ 8,003. 77 Closing Inventory: $5,233.96 Food Cost- Cash Sales: $18,001.22 Charges: $4,999.10 Promotions: $846.43 Staff Meals: $1,142.33 Monthly Sales Total = Monthly food Cost % - March: Opening Inventory = Purchases: $8,050.35 Closing Inventory: $4,989 88 Food Cost- Cash Sales: $23,004.44 Charges: $866.27 Promotions: $233.70 Staff Meals: $1,355.68 Monthly Sales Total = Monthly food Cost%= Inventory Control Inventory is conducted on a regular basis to ensure that the food cost percentage is maintained. Most food service establishments conduct an inventory once a month. Firstly, all stock must be counted. The stock in the kitchen, store room, freezers and refrigerators are included in this counting of inventory. When the counting is complete the almost endless task of determining the value of the stock is undertaken to establish a total value. This is called the closing inventory. The previous month s closing inventory is the new month s opening inventory. Next a calculation occurs to determine the food cost percentage using this or a similar format Opening inventory: $14, 302. 96 Purchases: $26, 242. 88 Closing inventory: $13,449.33. Food cost: $27,096.51 Cash sales: $58,002.76 Charges: $21, 545. 23 Promotions: $788.55 Staff meals: $1,250. 48 Total sales: $81, 587, 02 Food cost percentage = 33.21 % Let s analyze these statistics and see if we can make something out of them. We know that the previous month s closing inventory is this month s opening inventory. In other word this was what was in stock at the beginning of this month. The term purchases means the total amount spent on food that was brought in over the course of the month. As previously stated the closing inventory is the total value of what remained in stock at the end of the month. This figure must be subtracted from the total cost because we cannot be penalized for stock we have not yet had the opportunity to sell to our customers. It is not possible to operate a food service establishment without food in stock. However, this figure must be reasonable and is closely scrutinized to prevent over purchasing. Here, then are our calculations so far. Opening inventory + purchases - closing inventory = food cost $14 2.96+$26,242.88-$13,449.33 = $27,096.51 Now we research our sales figures. The cash sales and charges represent the 16 amount of money spent by our customers. Promotions are meals that have left our kitchen without actual payment. Two for one coupons, complimentary meals and expense account meals for owners and management may be classified as promotions. Although these meals are not paid for a signed credit must be given to the kitchen to avoid an increase in the food cost percentage. In the event the management of our establishment wishes to provide staff meals at a minimal cost or no cost at all requires additional credit to the kitchen. All food that leaves the kitchen must be paid for or credited to the correct accounts. Generally, no food whatsoever should leave the kitchen without a signed credit or guest check. A sound system for inter departmental transfers must also be in place so that the chef does not pay for other departments products and costs. Examples would be lemons and limes to the bar or lounge. Cash sales +charges + promotions + staff meals = food sales. $58,002.76+$21,545.23+ $788.55 +$1250.48 = $81,507.52 One last calculation: Food cost divided by food sales X 100 = food cost % $27,096.51 divided by 81,507.52 X 100 =33.21 % Let s look at another example: Opening inventory: $4,222. 85 Purchases: $18,001.25 Closing inventory: $4,799.66 Food cost: $17,424.44 Cash sales: $34,800.65 Charges: $25,555.30 Promotion: $ 1 006. 77 Staff meals: $2,119.33 Total sales: $63,482.25 Food cost divided by food sales X 100 = food cost % $17,424.65 divided by $63,482.25 X 100 = 27.45% Assignment 5: Calculate the Following: January: Opening Inventory: $4,276.96 Purchases: $9,551.33 Closing Inventory: $4,223.71 Food Cost = Cash Sales: $24,996.20 Charges: $5,979.08 Promotions: $990.44 Staff Meals: $1,886.32 Monthly Sales Total = Monthly food Cost % = February: Opening Inventory = Purchases: $ 8,003. 77 Closing Inventory: $5,233.96 Food Cost = Cash Sales: $18,001.22 Charges: $4,999.10 Promotions: $846.43 Staff Meals: $1,142.33 Monthly Sales Total = Monthly food Cost % = March: Opening Inventory = Purchases: $8,050.35 Closing Inventory: $4,989.88 Food Cost = Cash Sales: $23,004.44 Charges: $866.27 Promotions: $233.70 Staff Meals: $1,355.68 Monthly Sales Total = Monthly food Cost % = Opening Inventory = Purchases: $7,987.55 Closing Inventory: $3,999.65 Food Cost = Cash Sales: $18,776.09 Charges: $6,009.88 Promotions $744.00 Staff Meals: $1,421.33 Monthly Sales Total = Monthly food Cost %= Daily Kitchen Reports: As we just discovered a monthly inventory is a method of determining the food cost percentage. This method, although very helpful, does not serve the kitchen on a day to day basis. If problems occur with the food cost percentage in the early stages of the month they will not be discovered until it is, in all probability, too late to rectify. Consequently a wise chef would keep an up to date and accurate set of records in the kitchen. These records not only keep us well informed on the financial status of our kitchen they also may point out problems as they occur making their solving much more pro-active. Although these daily reports will not exactly pinpoint the exact cause of problems it will give the caterer a general idea as to where to look for the cause. Keeping a daily record of the food cost percentage also keeps the chef and his brigade out of the line up at the employment insurance office because if he or she were to rely solely on the results of a monthly inventory, they may be surprised at the results and the subsequent consequences! As stated earlier, every delivery is accompanied by an invoice. These invoices are collected at the end of the day or early the following day and recorded in the daily kitchen report under their particular categories. For every invoice there must be a separate listing on the report. The invoice sums are then tallied to determine the total cost in each category. The total of all categories are then added to establish the food cost for each particular day. The food sales figure for the day is then listed on the report. A simple calculation is made to determine the food cost % for that particular day:
Expert Answer:
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
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