Cost Control Measures for Food Service Operations (1).ppt -...

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Cost Control Measuresfor Food Service OperationsChapter 9
ObjectivesDefine the Siamese twins ofmanagementSummarize the importance of controlsystemsClarify the use of financial statementsDefine fixed, variable, conversion, andcommon costs
Objectives (cont’d.)Outline the purpose of productionreportsRelate the concept of food cost and theForty ThievesSummarize inventory managementExplain how to calculate food and laborcosts
Objectives (cont’d.)Describe how to make payrollcalculationsPerform break-even analysis andillustrate the method used for graphing
Using Other People’s MoneyFood service operators can improveprofitability with efficient purchasing,stock management, and cost controlsPurchase stock using free credit fromsuppliersMaintain minimal yet sufficient stockQuick turns allow goods to be sold beforethe bills are due
The Importance of ControlSystemsControls, or systems of measureGauge progress of business towards itsgoalsPlanning and controls are the “SiameseTwins of Management”
The Importance of ControlSystems (cont’d.)Control process consists of four steps:Establish standards and proceduresTrain employees to follow themMonitor performanceTake appropriate action to correctdeviations
The Importance of QualityStandardsQuality can be measured using pre-determined standardsMeasurement should be made eachtime a meal is served
Evaluating Performance UsingFinancial StatementsFour primary financial statements usedto manage and control financesIncome statementsBalance sheetsCash flow statementsOperating budgets

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