FOOD COSTING

INDEX
➢Introduction of Food Costing 2
➢Budgeting & Budgetary Controls 4
➢Standard Purchase Specification 8
➢Purchase 9
➢F&B Controller 20
➢FIFO &LIFO 22
➢Standard Recipe /
Standard Yield / Standard cost 23
➢Standard Portion Control 26
➢Extra Formats 28
➢Recipe Calculations 29

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INTRODUCTION TO FOOD COSTING

Every business needs to obey one basic principle in order to survive: it must make
more money than it spends. In other words, its sales, or revenue, must be higher
than its costs. Revenue is the income from sales before expenses, or costs, are
subtracted.
What is cost?
Cost is the price an operation pays out in purchasing and
preparing products or providing services. Cost control is the
process by which an operation tries to keep its costs as low
a s possible.
What is food cost?
It can be described as the expense to a hotel or restaurant for goods
or services when the goods are consumed or services rendered. Food cost
determines restaurants profitability. It is what a plate is being sold for on a
menu verses what it costs to prepare the plate. "Every business wants their food
cost to be at or below 33%.Chefs and restaurant managers use cost control to
keep track of the history of sales in order
to predict the future of sales. &he past records of seasonal activity may give a better
picture of future seasonal activities in order for chefs and managers to order the
correct amount of food and beverages and thereby avoid over ordering and food
wastage. If the restaurant has too much food o n h a n d , t h e q u a l i t y o f
products will suffer and money will be lost. (s in most, if not
a l l , businesses, cost control is an intrinsic part of day) to
day operations that is necessary to ensure the restaurant’s profitability. Financial
statements, inventory lists, purchasing and history of sales are all important
components of cost control.
Types of costs
• Fixed costs
• Variable costs
• Semi variable cost
•
Fixed costs are the costs which remain the same whatever the volume of
sales. &these are usually non controllable cost./.These costs have to be
incurred by an operation and it increases with time. Examples are
advertising, rents, rates, insurance, salaries.
Variable Costs
These are costs which increase directly in proportion to the volume of
sales.(s sales increase these costs increase at the same rate. Example
costs of food, beverage etc.

Semi Variable Costs

These costs are defined as costs which increased with volume
o f s a l e s , b u t n o t i n d i r e c t proportion to them. These costs increase with

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the sales but not at the same rate. Example are fuel, cleaning ,laundry,
ETC.

Importance of food cost control

• Meeting Goals in terms of budget
• Identify areas of wastage and expenses
• Delegating targets to both operational and revenue generating department
• Maximization of profit though quality management.

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 Budget and budgetary control

Definition and Concept of Budget:

A budget is an instrument of management used as an aid in the planning,
programming and control of business activity. A budget may be defined as a financial
and/or quantitative statement, prepared and approved prior to a defined period of
time, of the policy to be pursued during that period for the purpose of attaining a
given objective. It may include income, expenditure and employment of capital.

Based upon this definition, a recreation budget of a person for one fine
evening may look as:

The budget is a statement showing the way the person plans to spend Rs. 121.50.

Thus budget is a written plan of action. A budget is used for cost control purposes
and it is one of the most important overall control devices employed by management.
A budget represents the financial requirements of different sections of the business
during a given period to achieve an estimated profit based upon a given volume of
sales.

A budget is based upon past statistical data and it predicts the estimated labour,
sales, production and other management requirements for future, i.e., for a definite
budgetary period (of time). A budget can be thought of as an overall plan for the
operation of the business in terms of sales, production and expenditures. Thus
budget acts as a coordinating device among the various functions of the business.

Definition and Concept of Budgetary Control:

Budgetary control makes use of budgets for planning and controlling all aspects of
producing and/ or selling products or services. Budgetary control attempts to show
the plans in financial terms. Budgetary control is the planning in advance of the
various functions of a business so that the business can be controlled. Budgetary
control relates expenditure to a section or department who incurs the expenditure, so
that the actual expenses can be compared with the budgeted ones, thus providing a
convenient method of control.

Budgetary control includes forecasts of income and expenditures (for the budgetary
period) on equipment, machinery, manpower, materials, etc., necessary for the
efficient production and distribution of estimated volume of sale. The budgetary
control when applied to a business as a whole or to different sections within the

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business-compares actual performance and the predicted performance and thus
enables all levels of management and supervision to know how their sections (of
business) are moving towards the achievements of budgeted targets.

Is corrective action needed; should it be applied? Thus, budgetary control attempts

to bring actual performance at par with the predicted performance by keeping a strict
supervisory eye on the actual performance and by exercising a control, if necessary.
Control follows the planning and co-ordination. Deviations from predicted plan or
performance are noticed by comparing actual and budgeted performances and
costs.

The differences between the two (i.e., predetermined and actual) figures-the
variances-are analysed and an action is taken quickly, at the right time and in the
correct place to correct the actual performance – as per the predicted or
predetermined plan or performance.

The Objectives (Functions) of Budgets, Budgeting and Budgetary Control:

1. Budget should specify units to be produced, broken down into sizes and styles, as
well as cost of production.

2. Budget should analyze all the factors affecting the sections/departments and the
business as a whole.

3. Budget should facilitate planning within the company. It should help planning
future income and expenses.

4. Budget should harmonise departmental programmes.

5. Budget should serve as a medium of propagating policies throughout the business

enterprise.

6. Budget should hold back or control unwise expenditure.

7. Budget should help stabilizing production and harmonise production and sale
programmes.

8. Budgeting should decide basis for expenditure of funds.

9. Besides planning, budgetary control should provide a basis for, measuring

performance and exercising control-control means noting when expenditures fall
outside the budget estimates, tracing down the cause of such variation and taking
necessary corrective action.

10. Budgetary control should watch the progress of achievements of the business
enterprise and evaluate policies of the management.

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11. Budgetary control should pin-point those areas which are not working efficiently
and according to the predetermined targets.

12. Budgetary control, after planning, should coordinate the activities of a business
so that each is a part of an integral total.

13. Budgetary control should facilitate financial control; and control each function so
that the best possible results may be obtained.

14. A budget should be flexible.

Advantages of Budget, Budgeting and Budgetary Control:

1. Policy plans and actions taken are all reflected in the budgetary control system.
There is a formal recognition of the targets which the business hopes to achieve.

2. Not only departmental programmes are developed, over expenditures in

departments are also curtailed and controlled.

3. Budgeting makes for better understanding, coordination and harmony of action in

a business enterprise, because all departments take part in budget preparation.

4. The targets, goals and policies of a business enterprise are clearly defined.v

5. Deviations from predetermined plans are brought to notice through variance

analysis and corrective action is stimulated by reports, statements and personal
contacts.

6. It provides management with a guide of daily activities; thus helps determining

performance and efficiency of each department, thereby leading to improvement.

7. It informs management the progress made towards achieving the predetermined

objectives.

8. It facilitates financial control.

9. Total capital required and price of an item (product) can be estimated in advance.

10. Budgetary control builds morale when operated in a truly managerial spirit, i.e., it
should not acquire merely a clerical outlook (or approach).

Limitations of Budget:
(i) Since budget is based on estimates, i.e., estimated sales, estimated costs,
estimated business conditions, etc. it may need periodic revisions because estimates
may not come out to be cent per cent true.

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(ii) A budget may not work if the idea of budgeting is not sold properly to different
sections of the business. Only the persons working in different sections can make an
established budget, a success. Thus it should be a cooperative budgeting.

A budget cannot work until the desire to make it work is established in the minds of
persons working in the different sections of a business concern.

Types of budget

Master Budget
A master budget is an aggregate of a company's individual budgets designed to
present a complete picture of its financial activity and health. The master budget
combines factors like sales, operating expenses, assets, and income streams to
allow companies to establish goals and evaluate their overall performance, as well
as that of individual cost centres within the organization. Master budgets are often
used in larger companies to keep all individual managers aligned.

Operating Budget
An operating budget is a forecast and analysis of projected income and expenses
over the course of a specified time period. To create an accurate picture, operating
budgets must account for factors such as sales, production, labor costs, materials
costs, overhead, manufacturing costs, and administrative expenses. Operating
budgets are generally created on a weekly, monthly, or yearly basis. A manager
might compare these reports month after month to see if a company is overspending
on supplies.

Cash Flow Budget

A cash flow budget is a means of projecting how and when cash comes in and flows
out of a business within a specified time period. It can be useful in helping a
company determine whether it's managing its cash wisely. Cash flow budgets
consider factors such as accounts payable and accounts receivable to assess
whether a company has ample cash on hand to continue operating, the extent to
which it is using its cash productively, and its likelihood of generating cash in the
near future. A construction company, for example, might use its cash flow budget to
determine whether it can start a new building project before getting paid for the work
it has in progress.

Financial Budget
A financial budget presents a company's strategy for managing its assets, cash flow,
income, and expenses. A financial budget is used to establish a picture of a
company's financial health and present a comprehensive overview of its spending
relative to revenues from core operations. A software company, for instance, might
use its financial budget to determine its value in the context of a public stock offering
or merger.

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Standard Purchase Specification

Standard purchase specification are concise description of quality, size, weight , or

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 creat a standard product.
Objective:
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 f & b dept.
e) To obtain a standard product so that measurement of performance of departments
can be accurate.
For proper and effective control, purchase specification should be used in all
purchasing. It help in bringing uniformity and consistency in buying, which maintains
required cost of product. Each specification is determined by purchase manger,
Executive chef, and F & B manager as per the catering policies, menu requirement
and price range. The specification format is maintained with F & B service and
production, receiving, stores department.

The purchase specifications contain:

a) Definition of each items.
b) Grade or brand name of each item
c) Weight, size, or count.
d) Unit against which price should be coated.
e) Special note for commodity

Advantages of Standard Purchase Specifications

1. Forces managers to determine exact requirements in advance for any

product

2. Useful in menu preparation

3. Eliminates misunderstandings between stewards and purveyors

4. Circulation of specifications for one product to several purveyors makes

competitive bidding possible

5. Eliminates the need for detailed, verbal descriptions of a product each time
it is ordered

6. Facilitates checking food as it is received

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PURCHASE
Once a menu is planned, a number of activities must occur to bring it to reality.

Purchasing is one of the basic stages- it involves procurement of raw materials from
the market in exchange of resources. This is an important job as a high cost factor is
involved in it. Purchase refers to the management of supply chain.

After procuring, subsequently storage is also essential- it must be ensured that the
purchased raw materials are not spoiled due to bad storage. Different raw materials
have different storage time limits and requires different conditions for proper storage.

Factors that drive the supply chain management in today’s world are:

1. Availability of information resources allow for easy linkages and

eliminate time delays

2. The level of competition in the domestic market as well as international

market demands that organizations be quick, agile and flexible.

3. Customers are becoming increasingly demanding and organizations

must be pro-active and feel the pulse of the market, take up challenges, know
the value of time in order to secure a place in the competitive marketplace.

For the supply chain to be effective, the following functions need to flow smoothly:

1. Internal Functions – i.e. day to day operations i.e. translating

customer requirement into actual orders. It includes quoting prices, possible
delivery dates, delivery arrangement and after sales service. E.g. Milk

2. Up-stream suppliers – An organization appoints persons who are

responsible for ensuring that the right suppliers are selected and that they
meet the performance expectations. They maintain cordial relationship with
supplier as act as a liaison between the suppliers and the internal customer
e.g. Engineering, Kitchen, HK etc.)

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 3. Down-stream Customers – This is the distribution channels,
processes and functions that the product passes through on its way to the end
customer. Take the example of a can of baked beans – goes through the
packaging unit, warehouse, dealer network, etc. Logistics are responsible for
actual movement of material between locations. One point entry for all
material in Hotel industry is the Receiving Department.

THE PURCHASING PROCESS

The objectives of a world class purchasing organization go far beyond the traditional
belief that the primary role of Purchase Department is to obtain goods and services
in response to internal needs. The objectives of this vital process is as follows:

SUPPORT OPERATIONAL REQUIREMENT

Purchase must support the needs of operations by providing an uninterrupted flow of

high quality goods and services that internal customers require. This can be done by:

• Buying at the right price

• From the right source
• At the required specification
• In the right quantity
• Delivery at the right time

Failure to respond to the needs of internal customer may lower the confidence these
internal customs have in purchasing department and may try to negotiate contracts
themselves (a practice known as “backdoor buying”)

MANAGE THE PURCHASE PROCESS EFFICIENTLY & EFFECTIVELY

• Manage effectively with the staff resources available and utilization to

optimum
• Adherence to administrative budgets

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 • Constant training leading to productivity improvement and better decision
making.

SELECT, DEVELOP & MAINTAIN SOURCES OF SUPPLY

• Must select and manage a supplier base that has potential for excellent
performance in terms of product cost, quality, delivery, reliability, technology or new
product development. E.g. check supplier profile, audit their premises, place trial
orders etc.
• After selection, purchase works directly with suppliers to improve existing
capabilities and develop new capabilities e.g. citronella candles

STRENGTHEN RELATIONSHIPS WITH OTHER FUNCTIONAL

GROUPS

• Communication with other functional groups who are their internal customers.
E.g. Quarterly Service Level Agreements between Departments to measure
performance
• Cross functional interaction with Departments helps develop strong positive
relationships and problem solving of bottle-neck areas e.g. CFT and SFT.

SUPPORT ORGANIZATIONAL GOALS &

OBJECTIVES

Purchase Department must actively involve and integrate into the strategic planning
process (BSC) of the organization by

· Monitoring market trends e.g. Price increases, shortages, etc and interpret the
impact of these trends on the Organizations objectives e.g. food cost

· Identify critical materials and services required to support the key performance
areas

· Develop supply options

PROCEDURES INVOLVED IN PURCHASING

Factors Descriptions

Market knowledge It is important for a purchase manager to know the commodity market as it is
a highly volatile market, where products vary in both quality and pricing. It is
desirable to pay a good price for a quality product, but paying good money

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 does not always ensure good quality. Therefore, it is important to develop and
build up relationships with reputed suppliers. It is necessary for the
purchasing manager to know where a particular commodity is grown and
what its seasonality is , it is also important to know the legal aspects of
purchasing . for e.g. it is illegal to buy deer meat in India, but in many
countries like Australia, England and U.S.A, it is not against the law. It is
equally important to know the market with regards to the supply and demand.
market knowledge includes

• supplier contacts
• supplier reputation
• supplier’s scale of business
Determine the kind In this topic, our main area of concern is F&B purchases. Since most of the
of purchase items in F&B have a limited shelf life, it is important to control the quantity that
needs to be purchased, this largely depends on indenting.

Some staple food, canned , bottled and dehydrated foods has a

comparatively longer shelf life. So this can be purchased in bulk to demand a
good rate from the supplier.

Frequency of the purchase depends on amount of storage space also

Specifications As per the menu, chefs need to do yield test to determine the specification of
a product. The specifications of a product also depends on the usage. For
e.g. there are 2 types of oranges in the market 1 has less juice but is very
sweet , which is called the table orange, such an orange has a thick peel and
can be used as a fruit, the other other variety is know as juice orange, it has a
thin peel and not very sweet , but it is very juicy and gives a good yield of
juice. Thus the specifications of an orange would differ in terms of its final
use . similarly for a large volume operation, it would be intelligent to buy large
potatoes that are easy to peel and process for volumes.

Designing the It is important to list out and design the purchasing processes for a particular
process of buying kind of product. There are two kinds of buying methods

• formal
• informal
the informal buying method may vary according to the market conditions and
is done verbally either in person or over telephone before ultimately
purchasing the product.
Such transactions might involve cash purchases or some suppliers might give
a credit period depending on the relationship between the purchaser and the
supplier. Such buying involves negotiation and filling up of tenders. The
suppliers agree to supply the goods at the agreed rate even when there is a

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 fluctuation in rate.

Receiving It is important to check whether the goods received are as per their
procedures specifications. Otherwise, the organization might be paying more for a sub-
standard quality. It is important for chefs to constantly check all the food
products and reject any food that is not as per the specifications. The supplier
is then given a time to procure the items as per the specifications, or else the
hotel can buy the product from the open market and charge the same to the
suppler. The goods are received as per the food safety laws, and the
temperature and the condition of the packaging are given utmost importance.
Catering establishments such as airline and hospitals have very strict
receiving quality standards to control quality and standardization. The step
after receiving goods is the proper storage of the food.

PURCHASING SPAN OF CONTROL

Just as departments carry out certain duties on behalf of the organization, Purchase
too has legitimate authority to make decisions that rightfully belong to their
Department.

1. Evaluate and Select Suppliers – Purchase presumably has the expertise and
training to do this thereby averting any “backdoor” buying – a situation when sellers
contact and attempt to sell directly to end users. Purchase can request for
assistance from internal customer when evaluating potential suppliers e.g.
engineering evaluates products and performance of product. This does not mean
that the sales representatives are not allowed to talk to non- purchasing
department. However they cannot make commitments to the seller or enter into
contracts.

2. Set the Standard Purchase Specification (SPS) and Review the

same: Purchase develop knowledge and expertise about a wide variety of
materials, sometimes in consultation with the user department, and these
specifications set the standard when material is received at the Stores. E.g.
cauliflower bulb only (without stem and leaves)

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 Standard purchase specification are concise description of quality, size, weight, or
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 a standard product.

Objective:

• To establish a suitable buying standard for particular commodity for

the hotel.
• To furnish the supplier in writing in specific term the requirement of
the hotel.
• To help in setting the price of a commodity.
• To obtain a standard product material for f & b dept.
• To obtain a standard product so that measurement of performance
of departments can be accurate.

For proper and effective control, purchase specification should be used in all
purchasing. It help in bringing uniformity and consistency in buying, which maintains
required cost of product. Each specification is determined by purchase manger,
Executive chef, and F & B manager as per the catering policies, menu requirement
and price range. The specification format is maintained with F & B service and
production, receiving, stores department.

The purchase specifications contain:

a) Definition of each items. b) Grade or brand name of each item

c) Weight, size, or count. d) Unit against which price should be coated.

e) Special note for commodity.

Copies of the purchase specification need to be sent to the following:

· The purchase department

· The supplier

· The executive chef

· The receiving department.

HOTEL XYZ

STANDARD PURCHASE

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 SPECIFICATION

PRODUCT:_________________

USE:_______________________

GRADE /
QUALITY:___________

UNIT:______________________

PRICE /UNIT:_______________

AVAILABILITY: SEASONAL / ALL YEAR ROUND

APPEARANCE: ______________

TEXTURE:___________________

COLOUR:___________________

FLAVOUR:__________________

PACKING:__________________

SIZE AND SHAPE:___________

NO. PER
KG:________________

MISCELLANEOUS:___________

3. Act as the Primary Contact with Suppliers – Purchasing is the primary contact
with suppliers but other functional departments can also interact with suppliers if
required after awarding of contract e.g. engineering department talks to electrical or
hardware supplier as they “speak their own language” thereby clearing any
ambiguity and improving communication between buyer and seller.

4. Awarding Purchase Contracts – Purchase has the right to determine how to

award the contracts based on a) competitive bidding b) negotiations or c) a
combination of both e.g. Tendering process

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5. Ensure regular feedback from internal customer on quality – Internal Customer
Satisfaction Survey. Take prompt action to resolve dissatisfaction

6. Ensure regular Vendor feedbacks – Quarterly Vendor Satisfaction Survey to take

proactive action to resolve issues.

7. Ensure Vendor Development of existing & new suppliers – visit vendor

premises, suggest areas for improvement and impart training to their delivery
personnel, hygiene awareness and concern for the environment.

8. Market Surveys – for new and better products, check on prices against contracted
prices etc. Competitive analysis of items.

For effective purchasing, it is essential that the following points are remembered:

• Know the market

• Determine the purchase needs
• Establish and use specification
• Design the purchase procedures
• Receive and check the goods
• Evaluate the purchasing task

It is important that the person responsible for the purchase job should have the
knowledge of the item to be purchased such as:

• Where they are grown

• Seasons of production
• Approximate cost
• Conditions of supply and demand
• Laws and regulations governing the markets and the products
• Marketing agents and their services
• Processing
• Storage requirements

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 • Commodity and product- its class and grade.

Buying methods:

These depend on the type of market and the kind of operation:

· Informal buying:

This is used mainly for casual buying, where the amount involved is quite large and
speed in purchase is desired. This usually involves the small organizations. This
category involves oral negotiations, talking directly to sales people, face to face or
using the telephone. Informal methods vary according to market conditions.

· Formal buying:

These are best for large contracts for commodities purchased over a long period of
time. Prices did not vary much during the year, once the basic price has been
established. This is also known as competitive buying, it involves giving suppliers
written specifications and quantity needs. Negotiations are normally written.

While selecting suppliers, the following things are to be kept in mind:

• The prices are competitive for the goods specified in relation to the quality.
• Financial terms offered relating to credit facilities and discount to settlement.
• The Standard Purchase Specification (SPS) for each item
• The delivery conditions- time of delivery, the package of the goods etc.

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Instruction to the suppliers:

After the supplier(s) have been selected, written instructions on the following should
be made:

• Special requirements’ delivery

• The person(s) authorized to accept and sign for supplies.
• The goods supplied will be as per the SPS.
• No alteration will be accepted between quoted and invoice price
• The name of the people authorized to order supplies
• The contract period (normally for a year)

STANDARD RECIPE

Standardized recipes are an important part of a well-managed food service program.

A standardized recipe specifically describes the exact, measurable amount of
ingredients and the method of preparation needed to consistently produce a high-
quality product. The exact procedures, the type of equipment, and the quantity and
quality of ingredients are listed.

Advantages of Standardized Recipes:

• Product Quality - Provide consistent high-quality food items that have been
thoroughly tested and evaluated.

• Projected Portions and Yield - Accurately predict the number of portions from
each recipe and clearly define serving size or scoop. Eliminates excessive amounts
of leftovers or substitutions because too little was prepared.

• Cost Control - Better management of purchasing and storage due to exact amount
of ingredients specified.

• Creativity - Using standardized recipes supports creativity in cooking. Employees

should be encouraged to continuously improve recipes. All changes need to be
recorded so they can be repeated the next time the recipe is used.

A standardized recipe includes:

• Recipe Name / Recipe Card Number / Section / Meal Pattern Contribution –

Include the name of the recipe, the recipe card number, the section that the recipe
should be classified under (breads/grains, entrée, etc.) and the contribution that one
serving makes toward the child nutrition meal pattern. Example: Pizzeria Pizza
Crust, B-48, Grains, 2.5 servings grain per portion. • Ingredients - Listed in order of
preparation and specifies the type of the food used, such as fresh apples; canned
corn; macaroni (uncooked); ground beef (raw).

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• Weight and Measures – The weight and measures of each ingredient used in
both weight and volume measure. Note: weighing ingredients is faster, easier and
more accurate.

• Procedure - Directions on how to prepare the recipe. Include directions for mixing,
number and size of pans, cooking temperature and time, and the directions for
serving.

• Yield – The yield of a recipe should be recorded as the total weight or volume
produced per 50 or 100 servings (or other specified number of servings). Example:
50 servings: 23 pounds four ounces or 100 servings: 46 pounds eight ounces or 50
servings: one quart 2 ¼ cups.

• Serving Size – List the number of servings that the recipe yields and the portion
size to be served. Example: 50 – ½ cup servings. Consider including the suggested
portioning tools to use. Example: 50 – ½ cup servings (No. 8 scoop).

• Cost per serving (optional) - Determine the total cost to prepare the recipe and
divide by the number of servings prepared to equal the cost of one serving.

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F&B CONTROLLER

Position Summary:
As a Food and Beverage cost controller, you are primarily responsible for calculating
costs of food and beverage items and also responsible for the short and long-term
planning of the f&B controlling and pricing aspects.
Additionally responsible to record information and produce control reports
periodically to help maintain a suitable inventory of food and beverage items for the
entire hotel. He/she also changes the price of menus items based on the costing
information they collect and also actively take part in engineering the menu in terms
of the pricing.

F&B Cost Controller Duties and Responsibilities:

1. Able to effectively control the Food & Beverage Cost.

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2. Control the Food and Beverage outlets in terms of wastage, pilferage and
efficiency.
3. Prepare variance analysis for food & beverage and communicating with
relevant parties.
4. Update and maintain receipts into the systems (FMC).
5. Check and verify voids in the POS systems.
6. Check and verify discounts on the POS systems.
7. Check and verify any happy hours discounts.
8. Check and verify all complimentary sales in POS systems.
9. Check and verify all staff meals and staff discounts.
10. Check and verify all Package meals.
11. Check and verify all settlements done on the POS system.
12. Check and cross verify if all sales have been transferred correctly to the
Property Management systems (PMS).
13. Check and verify for any lost postings.
14. Check the cost of sales in all F&B outlets and ensure that the costs are within
budget.
15. Check the menu pricing on the POS systems and ensure the correct prices
are loaded.
16. Check the restaurant and bar checks on daily.
17. Check the complimentary and confirm that all are approved.
18. Daily Import of Micros Sales to Materials Control system.
19. Tally all end of shift reports generated from all POS tills.
20. Continuously study weaknesses in F&B control implemented at the Hotel and
provide suggestions for improvements.
21. Check the daily Food & Beverage revenues report submitted by the income
audit for the accuracy of covers and average check.
22. Responsible for linking the articles and Recipes in Material Control.
23. Responsible for preparing daily Food and Beverage Report and distribute to
management.
24. Responsible for monthly F&B Report and distribute to management.
25. Responsible for surprise spot checks at all F&B outlets.

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 26. Prepare Duty Drinks and management report and confirm that this is as per
entitlement.
27. Prepare the daily and monthly cost report department in relation to cost of
sales.
28. Prepare daily staff meal cost report.
29. Participate in stock taking at the restaurants.
30. Spot check on the receiving department to ensure that the scales are correct
and goods are checked for quality.
31. Check and ensure that no material is issued out from the store without
requisition or approval from the respective department head.
32. Check and ensure all menu items have a recipe.
33. Coordinate with restaurant management and finance to sort out issues
pertaining to F&B.
34. Update selling prices in POS as per the instruction from authorised persons.
35. Maintain the security of the information held by the department.
36. Responsible to maintain the Menu Pricing, Consumption and POS systems.
37. Any other tasks as and when required by the management.

FIFO

FIFO is a method of accounting which assumes that the oldest stock is sold first.
Using FIFO, the oldest purchase costs of goods are recognized as costs first.
The FIFO method assumes that goods are withdrawn from stock in the order in
which they are received.
LIFO
last in, first out. abbreviation. (Accounting: Management) LIFO is a method of
valuing inventory which assumes that the newest stock is sold first. LIFO is not
generally accepted as a suitable method of stock valuation because it does not
reflect normal practice in which oldest stock is used first.

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STANDARD YIELD

Yield in culinary terms refers to how much you will have of a finished or processed
product. Professional recipes should always state a yield; for example, a tomato
soup recipe may yield 15 L, and a muffin recipe may yield 24 muffins. Yield can also
refer to the amount of usable product after it has been processed (peeled, cooked,
butchered, etc.)

For example, you may be preparing a recipe for carrot soup. The recipe requires 1
kg of carrots, which you purchase. However, once you have peeled them and
removed the tops and tips, you may only have 800 grams of carrots left to use.

In order to do accurate costing, yield testing must be carried out on all ingredients
and recipes. When looking at yields, you must always consider the losses and waste
involved in preparation and cooking. There is always a dollar value that is attached
to vegetable peel, meat and fish trim, and packaging like brines and syrups. Any
waste or loss has been paid for and is still money that has been spent. This cost
must always be included in the menu price.

Menus used in the dining room give both the wait staff and guests important
information about what your establishment offers, and your recipes give detailed
instructions to aid kitchen staff in producing those menu items. More importantly,
carefully designed menu and comprehensive recipes can assist the professional chef
in streamlining kitchen operations and controlling costs. The concepts explored in
“Kitchen Calculations” are powerful tools that will improve efficiency and
organization. We have designed each segment of the “Kitchen Calculations” toolkit
to help you and your staff overcome some of the more common kitchen math
challenges that directly affect your bottom-line. ¾ Yield Percentage: Explore the
various components of a yield test and learn how to identify the factors that might
affect yield percentage. ¾ Cost Calculations: Discover one of the most important
elements in budgeting and predicting your finances. ¾ Edible Portion Cost: Learn
how cost affects purchasing and your recipe. ¾ Recipe Costing: Uncover the
importance of costing skills that will lead to greater profit in your operation.

YIELD CALCULATION:

Yield Percent is a vital tool for determining how much of a product to purchase or
used in a recipe. Calculating yield percentage is critical to placing an accurate food
order. Improperly calculating your food order can result in having too much or too
little of a given ingredient. Too much of an ingredient will put you in the situation of

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scrambling to create a new dish to entice your customers and use your excess
product. On the flip-side, running short of an item or ingredient can only lead to
disappointment for customers longing for your new "signature dish." Determining the
Yield Percentage of your recipes in advance will lead to greater efficiencies and a
more productive operation. By utilizing the following formulas and tips, you and your
staff will lower your food costs and create a healthier bottom-line.

As-Purchased Quantity (APQ): The weight, volume, or count of the product as it is

received from the vendor. The cost of 50# bag of potatoes, before fabrication, is the
as-purchased quantity or APQ.

Edible Portion Quantity (EPQ): The weight, volume, or count of the product after it
has been cleaned, peeled, or prepared (fabricated) and is ready for use. The word
edible signifies the condition of the product as ready for use in the dish you are going
to prepare within your operation.

Trim: The weight or volume of the waste. This factor can be determined
mathematically as the difference between APQ and EPQ. APQ – EPQ = Trim

Example: The edible portion of a cleaned bag of 50 KG of potatoes would be the

EPQ and would weigh in at approximately 42.5 KG.

50 KG – 42.5 KG = 7.5 KG (WASTAGE)

Yield Percentage:

The percentage of the as-purchased quantity that is edible. There are three major
applications for yield percentage.

1. Computing the minimum amount to order

2. Recipe costing

3. Determining the maximum number of servings that a purchased amount will yield

Yield Percentage Formula = Edible Portion Quantity/As-Purchased Quantity x 100

Example: Your operation has purchased 50 pounds of potatoes.

Upon cleaning and peeling, there are 42.5 pounds remaining and 7.5 pounds of
trim.

We will use the 3-Step Process to Calculate Yield Percentage.

1. Identify the EPQ and APQ

2. • APQ = 50 KG (whole potatoes)
3. • EPQ = 42.5 KG (cleaned and peeled potatoes)
4. • Yield Percentage = EPQ/APQ X100
5. 42.5 KG/50 KG X 100 = .85*100 = 85%

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CALCULATING COST USING YIELD PERCENTAGE

25
PORTION CONTROL

Learning Objectives

1. Portion control aids in eliminating the guess work from purchasing to service

2. Standardized recipes provide a guide for practicing portion control

3. It is essential to always use the correct portion control tool

What is Portion Control?

• A practice that results in a standardized serving of food to ensure equal cost,

caloric content, and nutritional value – Instructions outlined in standardized recipes
provide the guide for practicing portion control –

Standardized recipe:

• Developed under controlled conditions

• Ensures the correct proportion of ingredients

• Standardizes procedures for cooking

• Standardizes yield, regardless of who prepared it or where it is prepared

Standardized Recipes

Advantages: –

Consistent amount of product prepared –

Consistent taste and appearance –

Consistent nutrient content –

Efficient purchasing procedures –

Inventory control –

Labour cost control Reasons for Portion Control

• Increase resident confidence

• Meet dietary guidelines and nutritional recommendations

• Manage food costs

• Eliminate food waste

• Provide purchasing guide

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Employing portion control strategies simplifies the ordering process:

1. Utilize standardized recipes

2. Quantify recipes based on current census

3. Purchase appropriate ingredients

4. Prepare ingredients and portion for service according to recipe instructions

5. Yield appropriate number of portions to serve census Minimize Underproduction

• Portions prepared for service should equal portions planned for production

• Control quantities throughout the flow of food

• Determine the number of portions intended per pan, pot, or sheet before service
Understanding a Standardized Recipe

Failed portion control will likely lead to: –

Inaccuracies –

Differences in taste and quality –

Differences in yield –

Changes in nutrient content

• Use the serving utensil designated by the recipe to portion food items and ensure
proper yields Scenario: Inaccurate Portion Control • Recipe yields 50 ½ cup portions
• Employee serves ¾ cup

portions Consequences: Inaccurate Portion Control • Financial outcomes: – Food

shortage – Increased costs • Medical outcomes – Nutrient restrictions of therapeutic
diets exceeded • Examples: – Unintentional weight gain – Excess sodium intake •
Serving a meal, as specified by the diet order, is just as important as administering
medication correctly Serving Utensils

• Many serve as portion control tools to ensure proper weights or volumes of items
are served • Examples: Numbered scoops or ladles of known measures • Scoop
number is related to the number of scoops in one quart – 8, scoop: 8, ½ cup portions
per quart • Ladles are labeled with capacity

Incorrect Portioning Tools • Any tool that does not allow for accurate portioning –

Examples: • Gloved hand • Slotted spoon • Tongs Portion Sizes Yielded from
Serving Utensils Weight Measurements

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 EXTRA FORMATS

Store bin card

MEAT TAG FORMAT

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FOOD COST SUMS

1. In one dish, you use 2 sticks of celery. Your purchase price for a
bunch of celery is Rs 0.98. This particular bunch has 15 sticks of
celery in it. What is the cost of celery for this dish?
0.12

0.21

0.06

0.40

2. The labour cost for a certain dish is RS. 40 per hour. If it takes 45
minutes to make the dish, what is the labour cost for this
particular dish?

60

30

20

28

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