Monitoring Foodservice Operations III: Actual vs' Standard Food Costs

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Monitoring Foodservice Operations III Actual vs.
Standard Food Costs

• HRT 276 Chapter 11
• Part II Food Control

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Thanks to

• The information in this presentation comes from
  Chapter 11
• Principles of Food, Beverage, and Labor Cost
  Controls
• By Paul R. Dittmer
• 7th Edition. 2003. New York John Wiley Sons

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Introduction

• This is the Theoretical vs. Actual Food Cost
  comparison we have discussed previously
• Standard Cost agreed-upon costs of goods and
  services used to measure other costs
• Standard Portion Cost the amount a standard
  portion should cost, given the standard
  procedures for its production

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Comparing Actual Standard Costs

• Daily calculating and comparing each on a daily
  basis
• Periodic Determining the standard costs from
  records of actual portion sales over a period of
  time
• Weekly
• Monthly
• Cumulatively

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Daily Comparison

• Pre-Cost vs. Post-Cost evaluated daily
• Remember that theoretical (pre-cost) assumes the
  ideal situation
• The overall theoretical cost also assumes perfect
  forecasting
• Errors in the computation, related to
  forecasting, can be corrected using a calculation
  that adjusts for changes in the sales mix
• The calculation is another weighted average

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Daily Comparison

• Standard costs can be changed
• Alter portion size
• Change ingredients (for example quality or
  brand)
• Change recipes (for example batch vs. ready)
• Or some combination of these
• Sales figures can be changed
• Change menu prices
• Add items, eliminate items, sell packaged meals

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Daily Comparison

• Actual Cost
• Actual Food Cost / Actual Food Sales
• Standard Cost (Theoretical)
• Standard Cost / Actual Food Sales
• The comparison may lead to a potential savings
  (see Figure 11.3)

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Periodic Comparison

• The procedure is more common as many operations
  are unable to spend the time to do daily
  comparisons
• Other than the procedure takes into consideration
  more days, it is virtually the same as the daily
  calculations
• A cumulative system may allow for daily as well
  as ongoing, periodic comparisons

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Periodic Comparison

• The Restaurant at Kellogg Ranch system