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👯