Chapter 1
This type of cost stays the same regardless of sales volume.
What is a fixed cost?
A plan that indicates an operation’s financial objectives or standards.
What is a budget?
Descriptions of the quality requirements of the products that are purchased.
What is product specification?
The method that divides 100 by the desired food cost percentage to determine a price factor.
What is the factor method?
The replenishment of stock by a vendor made on a regular basis.
What is standing order?
A document used to adjust information about product quantities or costs.
What is a credit memo?
A chart showing what and how much food to prepare for service.
What is a food-production chart?
The main tool linking menu portions and food cost control.
What is portion control?
When managers can directly influence an expense, it’s known as this type of cost.
What is a controllable cost?
A budget that allows an establishment to plan for the replacement of high-cost equipment that wears out, and to purchase new types of equipment that may come on the market.
What is Capital Expenditure Budget?
The formula: Opening inventory + Purchases – Closing inventory.
What is cost of sales?
The difference between the menu price and the item’s food cost.
What is contribution margin (CM)?
A form listing items to purchase, their prices, and delivery dates.
What is a purchase order (PO)?
This inventory valuation method uses the most recent purchase price.
What is FIFO or latest price method?
The formula where flour equals 100% and all other ingredients are proportional.
What is baker’s percentage?
A system for controlling the operation’s cash generation, product usage, and inventory.
What is POS (Point-of-sale) system?
Food, beverage, and labor costs together make up this key figure.
What is prime cost?
The minimum sales level required to cover all costs.
What is the break-even point?
The ratio of food cost to sales revenue.
What is food cost percentage?
This analysis groups menu items as stars, plow horses, puzzles, or dogs.
What is menu engineering?
A description of the desired product’s name, intended use, grade, size, and other product characteristics; it can include general instructions regarding delivery, payment procedures, and other pertinent data.
What is specification?
A form listing items and quantities needed from the storeroom.
What is an issuing form?
A measure of how popular an item is within its category.
What is the popularity index?
Server technique that increases sales through value-added suggestions.
What is suggestive selling?
The difference between actual results (i.e., sales) and targeted or budgeted results.
What is Variance?
A budget that is based on several possible levels of sales activity, also known as a variable budget.
What is flexible budget?
The percentage of sales volume each menu item contributes to total sales.
What is sales mix?
The cost of side dishes and condiments included with an entrée.
What is the Q factor?
The amount of stock necessary to get the kitchen through until the next order is delivered.
What is par level?
A type of fraud in which frozen seafood is thawed to appear fresh.
What is slack-out seafood?
When converting recipes, a multiplier used to adjust the quantity of ingredients on the existing recipe to the quantity needed to produce the desired yield.
What is conversion factor?
A food item that is measured or weighed prior to going to the service line.
What is pre-portioned item?
This financial document helps managers monitor actual performance and identify variances.
What is an income statement?
A formal one-year operating plan to achieve the financial goals of an organization.
What is Operating Budget?
A method used to cost an ingredient after it has been trimmed and waste has been removed so that only the usable portion of the item is reflected.
What is EP Cost?
Pricing determined by local economic and competitive conditions.
What is market-driven pricing?
A theoretical inventory count based on goods received and issued.
What is perpetual inventory?
Sets of guidelines established to harmonize business transactions law across states.
What is UCC (Uniform Commercial Code)?
Food that has been previously produced but not served to customers.
What is carry-over production?
A form that shows sales, cash, and charges collected during a shift.
What is a daily sales report?