A: Standards are planned or expected results of the operation. The standards are prepared and kept before the operation starts and these standards are compared with the actual results after the operation is over.
Thursday, October 15, 2009
Thursday, March 26, 2009
Question and Short Answers Part 5
Q: Credit Memo
A: Credit Memo is a memorandum filled by the catering establishment and handed over to the supplier for the short of supply of raw materials, either quality or quantity. The value of the short of supply is credited to the buyers account.
Q: Marking and Tagging
A: Marking and tagging is an index card, which carries the invoice information of the raw material. This card is attached to the raw material. Marking and Tagging makes it easier to judge whether stock rotation plans are effective. Also when valuing inventory, cost data can be taken directly from the index card; this saves the time. Tagging is often used with meats and seafood and is done when the products are received at the receiving area.
Q: Blind receiving
A: This is a measure to control pilferage in the receiving area. In this method the supplier is asked to put the bill directly to the accounts department instead of giving it to the receiving area. So the receiving clerk has to count, weight and measure all the raw material he receives and enter it correctly in the Daily Receiving Report (DRR).
Q: Product rotation
A: Product rotation is the turnover of raw material in the storage. Product rotation indicates movement of raw material from the storage to the production area and converted to revenue, accordingly new raw materials are replenished in the store.
Q: Perpetual Inventory System:
A: Perpetual Inventory System is an inventory control tool. ICMA London has defined this system as “ a system of record maintained by controlling department, which reflects the physical movement of stock and their current balances”. It is a method of recording stores balances after each receipt and issue to facilitate regular checking and to obviate closing down of work for stock taking.
Q: Perpetual inventory card
A: Perpetual inventory card is an index card. In the perpetual inventory system a record is maintained on a perpetual inventory card for each item regarding the purchases, the requisitions and the remaining balance. By using this card the current status of stock in hand is known.
Q: Inventory Turnover
A: The Inventory Turnover Rate shows the number of times in a given period that inventory is converted or turned into revenue. In financial terms, it measures the rate at which inventory is turned into food or beverage costs required to generate food or beverage income.
Q: Non-Productive inventory
A: Non-Productive Inventory refers to products in storage that are not issued to production areas during the accounting period (usually monthly). In order to determine how much money is tied up in non-productive inventory, managers measure the inventory turnover rate.
A: Credit Memo is a memorandum filled by the catering establishment and handed over to the supplier for the short of supply of raw materials, either quality or quantity. The value of the short of supply is credited to the buyers account.
Q: Marking and Tagging
A: Marking and tagging is an index card, which carries the invoice information of the raw material. This card is attached to the raw material. Marking and Tagging makes it easier to judge whether stock rotation plans are effective. Also when valuing inventory, cost data can be taken directly from the index card; this saves the time. Tagging is often used with meats and seafood and is done when the products are received at the receiving area.
Q: Blind receiving
A: This is a measure to control pilferage in the receiving area. In this method the supplier is asked to put the bill directly to the accounts department instead of giving it to the receiving area. So the receiving clerk has to count, weight and measure all the raw material he receives and enter it correctly in the Daily Receiving Report (DRR).
Q: Product rotation
A: Product rotation is the turnover of raw material in the storage. Product rotation indicates movement of raw material from the storage to the production area and converted to revenue, accordingly new raw materials are replenished in the store.
Q: Perpetual Inventory System:
A: Perpetual Inventory System is an inventory control tool. ICMA London has defined this system as “ a system of record maintained by controlling department, which reflects the physical movement of stock and their current balances”. It is a method of recording stores balances after each receipt and issue to facilitate regular checking and to obviate closing down of work for stock taking.
Q: Perpetual inventory card
A: Perpetual inventory card is an index card. In the perpetual inventory system a record is maintained on a perpetual inventory card for each item regarding the purchases, the requisitions and the remaining balance. By using this card the current status of stock in hand is known.
Q: Inventory Turnover
A: The Inventory Turnover Rate shows the number of times in a given period that inventory is converted or turned into revenue. In financial terms, it measures the rate at which inventory is turned into food or beverage costs required to generate food or beverage income.
Q: Non-Productive inventory
A: Non-Productive Inventory refers to products in storage that are not issued to production areas during the accounting period (usually monthly). In order to determine how much money is tied up in non-productive inventory, managers measure the inventory turnover rate.
(Note: This blog is to provide some inputs to the students of hotel management. Additional referrence is suggested for the complete and indepth understanding of the subject.)
Question and Short Answers Part 4
Q: Sales Mix
A: Sales mix is a term referred to the proportion of the sale of items to each other in a food service organization. In a hotel serving different cuisines in different restaurants, sales mix will refer to the proportion of the sales of all the restaurants to each other.
Q: Contribution Margin
A: Contribution margin is the amount left in selling price after deducting the standard food cost. Contribution is the amount contributed to the profit. Contribution margin is equal to gross profit.
Q: What is a popularity index? What are its uses?
A: Popularity index is an index which shows the popularity of each menu item in relation to the other. Popularity index is calculated in percentages.
Q: Menu Engineering
A: Menu Engineering is the most popular method of menu analysis devised by Michael L. Kasavana and Donald L. Smith. Menu Engineering analysis is done by using Popularity index and profitability index of the menu items.
Q: Loss Leader
A: Loss leader is a subjective pricing method. In this method an unusually low price is set for a menu item. This pricing method is used to attract the guest with low pricing.
Q: Intuitive pricing method
A: Intuitive pricing method is the wildest method utilized by a manager to set up the menu item prices as this method totally depend upon the institution of the manager, his fancies and guesses. This is a risky method of pricing and often results in huge losses.
Q: Reasonable price method
A: Reasonable pricing method is subjective pricing method where the manager guesses the most reasonable value of the menu item by keeping the restaurant’s service and decore. Here the manager may keep any price he feels will be fair to be charged.
Q: Standard Recipe
A: Standard Recipe is the written formula to produce a menu item. Standard recipe is considered as one of the cost control tool.
Q: Cost Factor
A: Cost Factor is a calculated value used to find out new cost per servable quantity whenever the market price changes. Cost Factor is used for adjusting the Standard Recipe Yield.
Q: Mark-up Pricing method
A: This is a type of Menu pricing method where the cost of ingredient is taken as a base to which a calculated amount is called the mark-up is multiplied to get the base selling price. It is important to keep in mind that the mark up should cover all the non-food cost and the desired profit.
Q: Ratio pricing method
A: Ratio pricing method is type of pricing method used by catering establishments. In this pricing method the ratio between the contribution margin and the food cost is calculated. The ratio developed is used to calculate the contribution margin, which is added to the food cost to reach the base selling price.
Q: Menu Analysis
A: Menu analysis is post operational procedure, where the acceptability of the prevailing menu is analyzed. There are various kinds of menu analysis such as Menu analysis is done by various methods in different organizations depending upon the situation and requirements namely (a) Popularity Index (b) Profitability Index (c) Goal Value Analysis (d) Menu Factor Analysis (e) Hurst’s Menu Scoring (f) Kasavana’s Menu Item Analysis etc
Q: Purchasing
A: Purchasing can be defined as “ a function concerned with the search, selection, purchase, recipe, storage and final use of a commodity in accordance with the catering policy of the establishment”.
Q: Cash and carry
A: Cash and Carry is a purchasing method where the purchase is done against cash. This type of purchase is usually done by small to medium sized establishments, whose orders not very large.
Q: Total supply
A: Total supply is a purchasing method where the purchase is done at only one supplier. This supplier supplies all the items necessary for the establishment. This has the advantage of only having to negotiate with one supplier; a reduced volume of paper work; and far fewer deliveries. The main disadvantage is that of being tied to one major supplier. Whose prices may not be as competitive as when using several suppliers and whose range of certain commodities may be limited.
Q: Centralized purchasing
A: Centralized purchasing is purchasing all items for both or all the units together at one point. Under centralized purchasing one central department makes all purchases for the whole organization.
Q: Standing orders
A: Certain raw materials, which have a good turnover and have to be regularly replenished due to either (1) less storage space or the (2) Perishable nature of the product, are purchased regularly from the supplier after a regular interval. There remains standing order of a pre assessed quantity, which is supplied over a long period of time.
Q: Economic Order Quantity
A: Economic Order Quantity is the optimum quantity of raw material to be bought at each order. It sets equilibrium between carrying costs and ordering costs. At this point cost of carrying and cost of ordering are equal and the total cost is the lowest.
Q: Kickback
A: Kickback is term used to denote the theft and fraud in purchasing. In several common types of kickbacks the buyer and the purchase works in collusion with each other to cheat the company.
(Note: This blog is to provide some inputs to the students of hotel management. Additional referrence is suggested for the complete and indepth understanding of the subject.)
Question and Short Answers Part 3
Q: Sales Mix
A: Sales mix is a term referred to the proportion of the sale of items to each other in a food service organization. In a hotel serving different cuisines in different restaurants, sales mix will refer to the proportion of the sales of all the restaurants to each other.
Q: Contribution Margin
A: Contribution margin is the amount left in selling price after deducting the standard food cost. Contribution is the amount contributed to the profit. Contribution margin is equal to gross profit.
Q: What is a popularity index? What are its uses?
A: Popularity index is an index which shows the popularity of each menu item in relation to the other. Popularity index is calculated in percentages.
Q: Menu Engineering
A: Menu Engineering is the most popular method of menu analysis devised by Michael L. Kasavana and Donald L. Smith. Menu Engineering analysis is done by using Popularity index and profitability index of the menu items.
Q: Loss Leader
A: Loss leader is a subjective pricing method. In this method an unusually low price is set for a menu item. This pricing method is used to attract the guest with low pricing.
Intuitive pricing method
Intuitive pricing method is the wildest method utilized by a manager to set up the menu item prices as this method totally depend upon the institution of the manager, his fancies and guesses. This is a risky method of pricing and often results in huge losses.
Q: Reasonable price method
A: Reasonable pricing method is subjective pricing method where the manager guesses the most reasonable value of the menu item by keeping the restaurant’s service and decore. Here the manager may keep any price he feels will be fair to be charged.
Q: Standard Recipe
A: Standard Recipe is the written formula to produce a menu item. Standard recipe is considered as one of the cost control tool.
Q: Cost Factor
A: Cost Factor is a calculated value used to find out new cost per servable quantity whenever the market price changes. Cost Factor is used for adjusting the Standard Recipe Yield.
Q: Mark-up Pricing method
A: This is a type of Menu pricing method where the cost of ingredient is taken as a base to which a calculated amount is called the mark-up is multiplied to get the base selling price. It is important to keep in mind that the mark up should cover all the non-food cost and the desired profit.
Q: Ratio pricing method
A: Ratio pricing method is type of pricing method used by catering establishments. In this pricing method the ratio between the contribution margin and the food cost is calculated. The ratio developed is used to calculate the contribution margin, which is added to the food cost to reach the base selling price.
A: Sales mix is a term referred to the proportion of the sale of items to each other in a food service organization. In a hotel serving different cuisines in different restaurants, sales mix will refer to the proportion of the sales of all the restaurants to each other.
Q: Contribution Margin
A: Contribution margin is the amount left in selling price after deducting the standard food cost. Contribution is the amount contributed to the profit. Contribution margin is equal to gross profit.
Q: What is a popularity index? What are its uses?
A: Popularity index is an index which shows the popularity of each menu item in relation to the other. Popularity index is calculated in percentages.
Q: Menu Engineering
A: Menu Engineering is the most popular method of menu analysis devised by Michael L. Kasavana and Donald L. Smith. Menu Engineering analysis is done by using Popularity index and profitability index of the menu items.
Q: Loss Leader
A: Loss leader is a subjective pricing method. In this method an unusually low price is set for a menu item. This pricing method is used to attract the guest with low pricing.
Intuitive pricing method
Intuitive pricing method is the wildest method utilized by a manager to set up the menu item prices as this method totally depend upon the institution of the manager, his fancies and guesses. This is a risky method of pricing and often results in huge losses.
Q: Reasonable price method
A: Reasonable pricing method is subjective pricing method where the manager guesses the most reasonable value of the menu item by keeping the restaurant’s service and decore. Here the manager may keep any price he feels will be fair to be charged.
Q: Standard Recipe
A: Standard Recipe is the written formula to produce a menu item. Standard recipe is considered as one of the cost control tool.
Q: Cost Factor
A: Cost Factor is a calculated value used to find out new cost per servable quantity whenever the market price changes. Cost Factor is used for adjusting the Standard Recipe Yield.
Q: Mark-up Pricing method
A: This is a type of Menu pricing method where the cost of ingredient is taken as a base to which a calculated amount is called the mark-up is multiplied to get the base selling price. It is important to keep in mind that the mark up should cover all the non-food cost and the desired profit.
Q: Ratio pricing method
A: Ratio pricing method is type of pricing method used by catering establishments. In this pricing method the ratio between the contribution margin and the food cost is calculated. The ratio developed is used to calculate the contribution margin, which is added to the food cost to reach the base selling price.
(Note: This blog is to provide some inputs to the students of hotel management. Additional referrence is suggested for the complete and indepth understanding of the subject.)
Question and Short Answers Part 2
Q: List the advantages of using a standard recipe in brief.
A: The advantages of standard recipe are a) Maintenance of consistency in terms of taste, texture, cost and appearance b) less supervision required on employees c) Less training is required for employees d) Less wastage during production.
Q: Butchers Yield test.
A: Butchers’ yield test is test carried on to all the ingredients that have not 100 per cent yield or high cost in nature. Yield test is conducted to determine the available quantity of edible portions available from an ingredient.
Q: Define Standard Yield.
A: Standard Yield is the standard quantity of edible portion available from a raw material after processing and cooking.
Q: Standard Purchase Specifications.
A: Standard Purchase Specification is the written description of any ingredient in regard to its shape, size, volume, count, weight, color, texture, density etc. Every catering establishment prepares a purchase specification for each and every ingredient, considering its menu requirements.
Q: Standard Portion Size
A: Standard portion size is the standard quantity of portion of each dish to be served to a guest. It is a control method used in catering establishment. Standard portion size enables the establishment to control food cost and also to provide value for money to its customer.
Q: How does failure to follow standard recipes affect portion cost of a particular item?
A: Failure to follow standard recipe leads to inconsistent portion size, which in turn lead to variable standard portion cost. Standard recipe is the tool to maintain the food cost of each menu item.
Q: Explain the term Seat Turnover with an example
A: Seat turnover is the ratio indicating the number of times a given seat occupied during a meal period. Seat turnover is calculated by dividing the number of guests served by number of available seats.
Q: Present ten food and beverage cost control procedures followed by F&B operations.
A: Food and beverage control procedures are a) purchase control b) receiving control c) storage control d) requisition control e) issue control f) production control g) portion control h) KOT control i) revenue control and j) menu control.
Q: Prepare a sample standard purchase specification for red grapes to be used for preparing Fruit Salad.
A: Sample purchase spefication
Item Name : Apple
Item code : Ap 11006
Description : Ripe red grapes
Category : Premium
Color : Red/ Black
Other information : a) Packed in Food Boxes b) No softness or rot c) Properly ripe d) Skin should be intact
(This is just a simple purchase specification. Changes are expected from organization to organization)
A: The advantages of standard recipe are a) Maintenance of consistency in terms of taste, texture, cost and appearance b) less supervision required on employees c) Less training is required for employees d) Less wastage during production.
Q: Butchers Yield test.
A: Butchers’ yield test is test carried on to all the ingredients that have not 100 per cent yield or high cost in nature. Yield test is conducted to determine the available quantity of edible portions available from an ingredient.
Q: Define Standard Yield.
A: Standard Yield is the standard quantity of edible portion available from a raw material after processing and cooking.
Q: Standard Purchase Specifications.
A: Standard Purchase Specification is the written description of any ingredient in regard to its shape, size, volume, count, weight, color, texture, density etc. Every catering establishment prepares a purchase specification for each and every ingredient, considering its menu requirements.
Q: Standard Portion Size
A: Standard portion size is the standard quantity of portion of each dish to be served to a guest. It is a control method used in catering establishment. Standard portion size enables the establishment to control food cost and also to provide value for money to its customer.
Q: How does failure to follow standard recipes affect portion cost of a particular item?
A: Failure to follow standard recipe leads to inconsistent portion size, which in turn lead to variable standard portion cost. Standard recipe is the tool to maintain the food cost of each menu item.
Q: Explain the term Seat Turnover with an example
A: Seat turnover is the ratio indicating the number of times a given seat occupied during a meal period. Seat turnover is calculated by dividing the number of guests served by number of available seats.
Q: Present ten food and beverage cost control procedures followed by F&B operations.
A: Food and beverage control procedures are a) purchase control b) receiving control c) storage control d) requisition control e) issue control f) production control g) portion control h) KOT control i) revenue control and j) menu control.
Q: Prepare a sample standard purchase specification for red grapes to be used for preparing Fruit Salad.
A: Sample purchase spefication
Item Name : Apple
Item code : Ap 11006
Description : Ripe red grapes
Category : Premium
Color : Red/ Black
Other information : a) Packed in Food Boxes b) No softness or rot c) Properly ripe d) Skin should be intact
(This is just a simple purchase specification. Changes are expected from organization to organization)
(Note: This blog is to provide some inputs to the students of hotel management. Additional referrence is suggested for the complete and indepth understanding of the subject.)
Questions and Short Answers Part 1
Q: Explain and differentiate between the terms a) Standard Food cost b) Basic food cost.
A: The institute of cost and management Accountants, London defines standard cost as “ The predetermined cost based on a technical estimate for material, labor and overhead for a selected period of time and for prescribed set of working condition”. Where as Basic food cost is the cost of all ingredients used to make a menu.
Q: What is an Ideal Cost
A: It is a method of calculating standard food costs based on the actual number of each menu item sold during a day or meal period. The actual count of each item sold is multiplied by its per item standard food cost to arrive at the expected cost for serving that number of the menu item.
Q: What do you mean by opportunity cost
A: It is the cost, which has been foregone for not using the facility originally planned. When a particular amount is available, this can be used for one purpose only. Although there may be two propositions. If one course is chosen then the door of the other one is closed. The loss incurred for not choosing the other one, thus termed opportunity cost. E.g. we can either open a discotheque or renovate the present Chinese restaurant. If we decide to renovate the present restaurant, the loss incurred is not opening the discotheque can be projected as opportunity cost.
A: The institute of cost and management Accountants, London defines standard cost as “ The predetermined cost based on a technical estimate for material, labor and overhead for a selected period of time and for prescribed set of working condition”. Where as Basic food cost is the cost of all ingredients used to make a menu.
Q: What is an Ideal Cost
A: It is a method of calculating standard food costs based on the actual number of each menu item sold during a day or meal period. The actual count of each item sold is multiplied by its per item standard food cost to arrive at the expected cost for serving that number of the menu item.
Q: What do you mean by opportunity cost
A: It is the cost, which has been foregone for not using the facility originally planned. When a particular amount is available, this can be used for one purpose only. Although there may be two propositions. If one course is chosen then the door of the other one is closed. The loss incurred for not choosing the other one, thus termed opportunity cost. E.g. we can either open a discotheque or renovate the present Chinese restaurant. If we decide to renovate the present restaurant, the loss incurred is not opening the discotheque can be projected as opportunity cost.
Q: List three costs of a restaurant that are fixed
A: Rent, insurance and Salary
Q: Give any two possible conditions that can lead to differences between actual and standard costs
A: Standard Food Cost is a predetermined cost based on a technical estimate, which can be different from the actual cost. Possible conditions are a) More sales than expected b) Any additional cost incurred during the production such as material, labor or overhead.
Q: Give an example of discretionary cost and Explain.
A: Re-furbishing of a guest room in honor of a visiting dignitary or complimentary wine with every steak ordered at the same price prevailing are the examples of discretionary cost. These are the costs incurred totally on the discretion of some person or a group of person from the management. These costs also known as managed costs or programmed costs.
Q: Name 3 direct costs incurred by a Food and Beverage Operation.
A: Direct Material (Cost of Floor in Bread making), Direct Labor (Salary of Baker) and Direct Expenses (for special tools, repair of a machine) are the 3 direct costs incurred by a Food and Beverage Operation.
Q: Why is it important to compare Standard & Actual Food Cost?
A: The review of operation is done by comparing the Actual cost with the standard cost. The reason for difference is analyzed for the betterment operation in the future. In this regard the comparison of actual and standard food cost is very important.
Q: Explain the role played by adjustment factors in adjusting standard recipe yields.
A: The role played by adjustment factors are a) Increasing or decreasing the yield of a standard recipe. b) Determining the new quantity of ingredient required to produce a menu item if the portion size is altered.
Q: Explain Average Food Service Check.
A: Average Food Service Check is a ratio between the revenue from sales and the guests served during a meal period. This is obtained by dividing Total sales by no. of guests.
A: Rent, insurance and Salary
Q: Give any two possible conditions that can lead to differences between actual and standard costs
A: Standard Food Cost is a predetermined cost based on a technical estimate, which can be different from the actual cost. Possible conditions are a) More sales than expected b) Any additional cost incurred during the production such as material, labor or overhead.
Q: Give an example of discretionary cost and Explain.
A: Re-furbishing of a guest room in honor of a visiting dignitary or complimentary wine with every steak ordered at the same price prevailing are the examples of discretionary cost. These are the costs incurred totally on the discretion of some person or a group of person from the management. These costs also known as managed costs or programmed costs.
Q: Name 3 direct costs incurred by a Food and Beverage Operation.
A: Direct Material (Cost of Floor in Bread making), Direct Labor (Salary of Baker) and Direct Expenses (for special tools, repair of a machine) are the 3 direct costs incurred by a Food and Beverage Operation.
Q: Why is it important to compare Standard & Actual Food Cost?
A: The review of operation is done by comparing the Actual cost with the standard cost. The reason for difference is analyzed for the betterment operation in the future. In this regard the comparison of actual and standard food cost is very important.
Q: Explain the role played by adjustment factors in adjusting standard recipe yields.
A: The role played by adjustment factors are a) Increasing or decreasing the yield of a standard recipe. b) Determining the new quantity of ingredient required to produce a menu item if the portion size is altered.
Q: Explain Average Food Service Check.
A: Average Food Service Check is a ratio between the revenue from sales and the guests served during a meal period. This is obtained by dividing Total sales by no. of guests.
(Note: This blog is to provide some inputs to the students of hotel management. Additional referrence is suggested for the complete and indepth understanding of the subject.)
Subscribe to:
Comments (Atom)