WEEK 3

CHAPTER 3: THE OPERATING BUDGET AS A CONTROL TOOL

Hello here😉 Today is our third week of study in cost control. this week we will go to chapter 3 is the operating budget as a cost tool.

The Operating Budget, Budget Standards:A budget is simply a forecast or estimate of projected revenue, expenses and profit and operating budget is a combination of known expenses, expected future costs, and forecasted income over the course of a year.

Forecasting Sales Income: 

Total Sales

• Refers to total volume of sales expressed in dollar (ringgit) terms.

Category

• Total sales or beverage sales, such as total steak sales or total seafood sales 

Server

• Total dollar volume of sales in a gives period like day,week and meal period.

Seat

• By the number of seats in the restaurant, usually by one year.

MONETARY TERMS

1. Sales Price

2. Average sale

3. Average sale per server 

NON-MONETARY TERMS

1. Total number sold

2. Cover

3. Total covers

4. Seat turnover

1. Variance

• (Sales this year - sales last year)

2. Percentage Variance

• Variance / Sales last year X 100

3. Revenue Forecast

• Sales last year + (Sales last year X % increase estimate)

4. Increase Revenue

• Revenue forecast - Sales last year

Sales = Cost of sales + Cost of labour + Cost of overhead + Profit

Sales = Variable cost + Fixed cost + Profit

S = VC + FC + P

THANK YOU👯

WEEK 2

CHAPTER 2: DETERMINING FOODS AND BEVERAGES STANDARDS.


Hello here😉 Today we in chapter 2 have learn about the determining food and beverages standards.

What is cost and material cost?

• Cost is to expense to a food service establishment for goods and services when the goods are consumed or service are rendered.

• Material Cost is the cost of purchase all costs incurred in getting raw material to the restaurants.

FORMULA:

OPENING STOCK: 

+ cost of purchase

- closing stock

- cost of staff meals 

= material cost

• Labour Cost

- the cost of labour that can be traced directly to the manufactured goods.
• Overhead Costs
Indirect Materials
- Materials used to support the production process
Indirect Labor
- Wages paid to employees who are not directly involved in production work
Cost Related to the Productions
- Costs related to the production facility
• Fixed Costs
- Unaffected by changes in sales volume
• Semi-Fixed Costs
- Contain a fixed and variable cost that not indirect proportion to sales volume.
• Variable Costs
- Clearly related to the business volume.

Elements of Costs
1. Controllable Cost
- costs that can be changed in the short term.

2. Non Controllable Cost
- Costs that are usually fixed cost and mangers do not have the ability to change it.

The Relationship Between Costs and Sales
√ Cost/Sales = Cost%
√ Cost/Cost % = Sales
√ Sales x Cost % = Cost
Standard Purchase Specifications:
1. Quality
2. Size
3. Weight
4. Count factor desired for a particular item.

√ QUANTITY 

Number of portion X Portion size (as a decimal)                               Yield percentage                

√ NUMBER OF PORTION 

Quantity X Yield percentage                                                 Portion size

√ PORTION SIZE

Quantity X Yield percentage
        Number of portion 

√ YIELD PERCENTAGE 

Number of portion X Portion size
     uantity (original weight)


Standard Portion Size
• Weight
• Volume
• Count

CONCLUSION 

What I get from this chapter 2 is that I can learn how to find answers according to the given formula.

THANK YOU👯

WEEK 1

CHAPTER 1 : INTRODUCTION TO HOSPITALITY COST CONTROL

Today we have learn about introduction to hospitality cost control. we have learn about:

3 main objectives of managing:

- Ensure guest feels welcome
- Facilities work for guest
- Operation continue to provide service while also making a profit

Food and Beverage Managers in Control:
Managing the Business
- managing business performance, projects, strategic decision and legal complexity

Managing Operation 
- Day to day operation

Personal Skill
- Interpersonal skill
- Self development


Managing People
- Managing individuals, teams, external contact and personal administration


Profit and Cost Center 

- Cost center is a submit of a company that is responsible only for its costs.

- Profit Center is a submit of a company that is responsible for revenues and costs.

• Definition and Importance of Control

Cost Control

- To eliminate excessive costs for food, beverages and labor to gain more profit.

Importance of Control

• Accomplishing Organisational Goals.

• Judging Accuracy of Standards.

• Making Efficient use of Resources.

• Improving Employee Motivation

• Ensuring Order and Discipline.

• Facilitating Coordination  In Action.

Steps in the Control Process

1. Establishing Standards

2. Establishing Procedurs

3. Training

4. Setting Examples

5. Observing and Correcting Employee Actions

6. Requiring records and Reports

7. Disciplining Employees

8. Preparing and Following Budgets.

CONCLUSION 

what I understand in this chapter is that I can learn a lot of introductions about this subject.

THANK YOU👯