Cost Controls Exam 2

Front 1

What is the beverage cost formula?

Back 1

Beginning Inventory
+ Purchases
– Ending Inventory
= Cost of Beverage Sold

Front 2

Adjustments: add or subtract

Transfers from the bar

Back 2

subtract

Front 3

Adjustments: add or subtract

Promotions

Back 3

subtract

Front 4

Adjustments: add or subtract

Cooking Liquor

Back 4

subtract

Front 5

Adjustments: add or subtract

Mixers

Back 5

add

Front 6

Adjustments: add or subtract

Food to the bar

Back 6

add

Front 7

Adjustments: add or subtract

Transfers to the bar

Back 7

add

Front 8

Actual vs. Potential Cost:
What causes the variance?

(7 things)

Back 8

a. Incorrect charges
b. Incorrect physical inventory valuations
c. Sales mix changes
d. Incorrect drink prices
e. Incorrect par stocks
f. Over-pour, spillage, and under-pour
g. Inadequate cash control procedures

Front 9

Beer product request log should be maintained so that:

Back 9

guest requests that cannot be filled are noted and monitored by management.

Front 10

Beer is typically sold in:

Back 10

cans, bottles or kegs.

Front 11

The shelf life of keg beer is the _______ of all packaging types, ranging from ___ to ___ days for an untapped keg

Back 11

shortest; 30-45

Front 12

Wine must be selected according to:

Back 12

product and packaging

Front 13

Operators generally sell wine by the:

Back 13

glass, bottle, and split or half bottle

Front 14

A ________is a wine producer.

Back 14

vintner

Front 15

Avoid the temptation to offer too many wines on a wine list because:

Back 15

it increases costs.

Front 16

operators will select spirits in two major categories:

Back 16

well and call liquors

Front 17

_________ are those spirits that are poured when the customer does not specify a particular brand name.

Back 17

Wells

Front 18

_____ liquors are those requested by brand name; extremely expensive ___ liquors are sometimes referred to as _______ liquors.

Back 18

call, call, premium

Front 19

The goal in purchasing beverages is:

Back 19

to have an adequate, but not excessive amount of product on hand at all times.

Front 20

A _____________ occurs when several different brands or products are used to completely fill the case.

Back 20

broken case

Front 21

As with food, the receiving clerk needs:
(3 things)

Back 21

a proper location, tools, and equipment.

Front 22

If beer is_______, that is, a date is stamped on the product to indicate its freshness, very ________inspection is required.

Back 22

fresh-dated; little

Front 23

Key beverage receiving checkpoints are:
(8 things)

Back 23

- correct brand
- correct bottle size
- no broken bottles
- freshness dates (beer)
- correct vintage (wine)
- correct unit price
- correct price extension
- and correct invoice total.

Front 24

If _______ are detected, a _______________ should be filled out and signed by both the ________ and _________

Back 24

errors; credit memo
delivery person; receiving clerk

Front 25

Storage areas should be:
(3 things)

Back 25

clean, free of infestation, and large enough to allow for easy rotation of stock.

Front 26

Define two-key system

Back 26

the individual responsible for the beverage area has one key while the other key is kept in a sealed envelope in a secured area. In the event of emergency, the envelope can be opened.

Front 27

The three components critical to wine storage are:

Back 27

temperature, light, and cork condition.

Front 28

A tremendously underutilized bottle size is a ___________, which is about half the size of the __________

Back 28

half-bottle or split; 750 ml bottle.

Front 29

Generally, wines should be stored at a temperature of _______________

Back 29

50 to 65F (10 to 18C)

Front 30

______ is an enemy of effective wine storage

Back 30

Heat

Front 31

When does oxidation occur?

Back 31

when oxygen comes in contact with bottled wine – it smells somewhat like vinegar.

Front 32

The _________protects wine from its greatest enemy, ______.

Back 32

cork; oxygen

Front 33

If transfers are not controlled and recorded, the restaurant’s food cost percentage will be _________.

Back 33

inflated

Front 34

What is a sales mix?

Back 34

The series of guest purchasing decisions that result in a specific food or beverage cost percentage.

Front 35

How do you catch a thief?
(6 ways)

Back 35

- Discrepancy Analysis
- "Inventory vs. Sales Shrink”
- Compare beer bottles to beer sold
- Compare inventory
- Mystery shoppers
- Daily beverage cost percent

Front 36

Why is our industry plagues with inventory control problems?
(3 reasons)

Back 36

- Bartenders control liquor and cash
- Bartenders main source of remuneration: tips
- Bar owners use outdated and misleading methods to analyze bar profitability

Front 37

Empty for full system:

Back 37

requires bartenders to hold empty liquor bottles in order to replace it with a full one

Front 38

Two types of inventory

Back 38

physical and perpetual

Front 39

What is physical inventory

Back 39

Physical Inventory - a physical count and valuation of all inventory on hand is taken at the close of each accounting period. (Most Accurate)

Front 40

What is perpetual inventory

Back 40

Perpetual Inventory - the entire inventory is counted and recorded, then additions to and deletions from total inventory are recorded as they occur. (Mainly for liquor and wine).

Front 41

Managing the Food and Beverage Production Areas
(5 things)

Back 41

Waste
Overcooking
Overserving
Improper carryover utilization
Inappropriate make or buy decisions

Front 42

AP vs. EP

Back 42

AP = EP / 1 – W%

AP = As purchased
EP = Edible Portion
W% = Waste %

Front 43

How can you reduce the overall product cost percentage?
(6 ways)

Back 43

- Decrease portion size relative to price.
- Vary recipe composition.
- Adjust product quality.
- Achieve a more favorable sales mix
- Ensure that all product purchased is sold.
- Increase price relative to portion size

Front 44

Daily Menu

Back 44

Daily Menu-changes everyday based upon changes in ingredients and carryovers

Front 45

Cycle Menu

Back 45

Cycle Menu-in effect for a specific time period.

Front 46

Daily or weekly specials provide:
(four things)

Back 46

variety, low-cost raw ingredients, carryover utilization, or test market potential for new menu items.

Front 47

Standard Menu

Back 47

Standard Menu-printed, a set menu that is the same day after day.

Front 48

Factors affecting menu pricing
(9 reasons)

Back 48

a. Local competition
b. Service levels
c. Guest type
d. Product quality
e. Portion size
f. Ambience
g. Meal period
h. Location
i. Sales Mix

Front 49

Value Pricing

Back 49

a. the practice of reducing all or most prices on the menu in the belief that total guest counts will increase

Front 50

Bundling

Back 50

a. selecting specific items and pricing them as a group. (Think value meals.)

Front 51

Contribution Margin

Back 51

i. The amount that remains after the product cost of the menu item is subtracted from the item’s selling price.

Front 52

Two methods for assigning menu prices

Back 52

Product cost percentage and Contribution Margin

Front 53

Desired Product Cost Formula

Back 53

1.00/ Desired Product Cost % = Pricing Factor

Pricing Factor x Product Cost = Menu Price

Front 54

Contribution Margin Formula

Back 54

Product Cost + Contribution Margin Desired = Selling Price

Front 55

Determine Labor Cost Percentage

Back 55

Cost of Labor/Total Sales

Front 56

Determine Sales per Labor Hour

Back 56

Total Sales/Labor Hours

Front 57

Determine Labor Dollars per guest served

Back 57

Cost of Labor/ Guest Served

Front 58

Determine Guest Served per labor dollar

Back 58

Guest served/ cost of labor

Front 59

Guest Served per labor Hour

Back 59

Guest served/ labor hour used

Front 60

____________ is the amount of work performed by an employee in a fixed period of time.

Back 60

Productivity

Front 61

By reducing labor-related costs, you:
(6 things)

Back 61

a. Improve Productivity
b. Increase Sales Volume
c. Combine Jobs
d. Schedule according to volume
e. Employee empowerment
f. Offer incentives

Front 62

Measuring Devices:
(4 types)

Back 62

jigger, free-pour, spout control, automated devices

Front 63

Name 6 out of the 10 of the examples of how employees steal.

Back 63

a. Working with the cash drawer open
b. Under-ringing sales
c. Overcharging customers
d. Undercharging customers
e. Overpouring
f. Underpouring
g. Diluting bottle contents
h. Bringing one’s own bottle into the bar
i. Charging for drinks not served
j. Drinking on the job

Front 64

Factors Affecting employee productivity

Back 64

1. Employee Selection
2. Training
3. Scheduling
4. Morale

Front 65

Employee Turnover Rate

Back 65

Employee Turnover Rate =
Number of Employees Separated/Number of Employees in Workforce