Store Room Operations Quiz 1
If your sales price is 16.30 and your variable cost is 5.30 and your food cost is 86, 609.00 and your profit is .18(211,000) what is your break even point for number of customers?
.18 x 211,000=37,980 profit=37,980 CM=SP-VC=16.30-5.30=11.00 CM=11.00 B.E.Pcust=FC+P/CM=86,609.00+37,980=124,589.00/11.00B.E.Pcust =11,327 customers
If your variable rate is .36 and your sales price is 14.50 what is your contribution margin?
1-VR=CR 1-.36=.64 CR=.64 SPxCR=CM 14.50X.64=9.28 CM=9.28
What are the 3 C's
1. Competitive Bidding 2. Communication with the vendor 3. Properly checking the food
Types of Cost are?
1. Fixed vs. Variable 2. Controllable vs. Non controllable 3. Unit and Total 4. Prime 5. Historical and Planned
What are the three cost controls?
1. Food cost 2. Formal budget/Budgets 3. Break even point analysis B.E.P
What are three examples of variable costs
1. Food costs or beverages costs; controllable; management can quickly implement changes in portion sizes and ingredients. 2. Paper supplies; controllable; management can change the cost by changing the quality or the size of items purchased. 3. Payroll cost for servers; controllable; (assuming no union contract with provisions prohibiting near-term changes); management can increase or decrease the number of personnel on short notice.
What are three examples of fixed costs
1. Interest mortgage; noncontrollable; usually a fixed monthly payment 2. License fees; noncontrollable; amount normally established by governmental authorities 3. Advertising (provided no long-term contract has been signed); controllable; can be increased or decreased at will.
What are 10 perishables
1. Lettuce 2.poatoes 3. grapes 4.lemons 5. strawberries 6. haddock (fresh) 7. chickens 8. whole milk 9. eggs (fresh) 10.bread
What are the 3 levels of perishability?
1. Perishables- lettuce, meat, fresh fish, fruits, berries, pork, veal. 1 week 2. Semi-perishables- dairy, root vegetables, citrus, cheese and apples. 1 month or less 3.Non-perishables- Salt, sugar, canned fruits, and vegetables, spices, groceries, staples. All throughout the 1 year or more.
What are 10 nonperishables
1. Salt 2. sugar 3. flour 4.pepper 5. cinnamon 6. macaroni 7. soup (canned) 8. tomatoes (canned) 9. apple sauce (canned) 10. cereal
Why are computers beneficial list 5 benefits?
1. Spreadsheet inventories 2. Menu publishing per day 3. Ordering direct via internet 4. House to house communication 5. Corporate communication
Where can information be obtained on sources of supply
1. yellow pages of the local telephone directory 2. managers of local retail food stores 3. other food service operators 4. industry publications 5. local business organizations such as Chamber of Commerce and Better business bureau. 6. Industry organizations such as local chapters of the National Restaurant Association, International Food Service Executives Association, etc. 7. Product websites and supplier websites.
Cost Factor Multiplier
100%= 1 C.F.M 50%= 2 C.F.M 33.3%= 3 C.F.M 25% = 4 C.F.M 20% = 5 C.F.M 10% = 10 C.F.M 5% = 20 C.F.M C.F.M= 1,2,3,4,5,10,20, 1-5, 10 and 20 %=(100, 1) (50, 2) (33.3, 3) (25, 4) (20, 5) (10, 10) (5, 20) Extra Credit .5 GPA
If you have 40 cans required for the upcoming period and you have 12 cans currently on hand and 15 cans to be left end of the month How many cans need to be ordered on that date?
40 cans Required - 12 cans on hand = 28 cans so far add the 15 buffer amount you get 43 cans to be ordered on this date
48 cans for 2 weeks 10 cans on hand 16 ending inventory how many cans will I need to order?
48 cans for 2 weeks 1 case of 24 for 2 weeks 24x2=48 -10 cans on hand 38 cans so far +16 cans ending inventory 54 cans amount to order (9 cases, assuming 10# cans )
How do you read a budget?
?
Static Budget
A budget prepared for one level of business activity.
Perpetual Inventory card
A card or other device used in the perpetual inventory method for recording additions to and issues from inventory, inventory balance, and such other pertinent information as supplier, size, par stock, reorder point, and reorder quantity.
Directly variable costs
A cost that varies directly with sales volume, such that every change in sales volume brings a corresponding change in that cost.
Sales control sheet
A form used to record cash and credit sales after guest checks have been settled by customers.
Periodic Order Method
A method for ordering food or beverages based on fixed order dates and variable order quantities. Ordering product for a specific time based on inventory. You take the amount you need minus your current inventory and add in the buffer amount for orders for a specific amount of time period. Ordering for a specific amount of time using manual inventory. The Simplest Method for a small business because it is simple, easy, fast, and effective.
Perpetual order method
A method for ordering food or beverages based on variable order dates and fixed order quantities.
Historical Cost
A past cost that has been documented in business records.
budget
A plan for making and spending money A financial plan/realistic terms that control our spending and are static and flexible. A financial plan/ realistic expression of management's goals and objectives expressed in financial terms. A realistic statement of management's goals and objectives, expressed in financial terms.
Labor Cost Control
A process used by managers to direct, regulate, and restrain the actions of people in order to obtain a desired level of employee performance at an appropriate level of cost.
centralized purchasing system
A system in which most or all purchases are made by a purchasing director for the entire organization. One centralized area buys products from multiple outlets. A system used by chains, franchises, and groups of independent operators that results in purchases for all participating units being made by one central office. Better pricing, buying in bulk Nonflexible
variable cost
A total cost that changes when sales volume changes. Variable costs are linked to business volume, such that total variable cost increases and decreases as sales volume increases and decreases.
control sheet
A traditional method of controlling revenue. Cashiers list guest checks by number on a cashier's sheet. Missing checks are spotted and revenue is verified.
What is a standard purchase specification?
A written detailed description of the product that we buy.
Planned cost
An anticipated cost, projected by management, that reflects business plans for the future.
sales forecast
An estimate of future sales, based on sales history and other information deemed relevant by management.
Perpetual Inventory Method
An inventory determined by keeping a continuous record of increases, decreases, and the balance on hand of each item of merchandise. is using par levels and reordering points to control whenever and how much you buy. A method for determining suitable order quantities for nonperishable foods enables a purchaser to place orders for fixed reorder quantities on varying dates.
Beverage
Any liquid intended for drinking. There are two general classifications of beverages: alcoholic and nonalcoholic.
standing order
Arrangements made between purveyors and foodservice operators that result in regular delivery of goods without specific orders preceding each delivery.
Standing orders
Automatic orders that show up without having to order it, it's only for non-perishable items.
if your food cost is 48,337.80 and your contribution rate is .60 what is your break even point in sales?
B.E.P$=FC+P/CR=48,337.80/.60=80,563 B.E.P$=80,563.00
if your food cost is 58,922 and your profit is 9,838 and your contribution margin is 3.82 what is your break even point in number of customers?
B.E.Pcust=FC+P/CM B.E.Pcust=58,922+9,838=68, 760/3.82=18,000 B.E.Pcust=18,000 customers
If your food cost is 113,231.64 and your contribution margin is 2.28 what is your Break even point in customers?
B.E.Pcust=FC+P/CM=113,231.64/2.28=49,663 B.E.Pcust=49,663 customers
If your Variable cost is 5.78 and your sales price is 13.22 what is your contribution margin?
CM=S-VC CM= 13.22-5.78=7.44 CM=7.44
If your food cost is 60,000 and your profit is 18,000 and your sales is 8.00 and your variable cost is 5.00 what is your break-even point in sales?
CM=S-VC=8.00-5.00=3.00 CM=3.00 CR=CM/S=3.00/8.00=.375 CR=.375 B.E.P$=FC+P/CR=60,000+18,000=78,000/.375=208,000 B.E.P$=208,000.00
Your cost for this item is 1.00 your sales price is 5.00 what is your food cost percentage?
Cost divided by sales equals food cost percentage. c/s=fc% 1.00/5.00=.20 move the decimal over two places FC%=20%
If your food cost percent is 33.3% and your cost is 1,000 what is your sales price?
C/FC%=S 1,000/.333 move decimal back two spaces S=3,003.00
If your food cost percent is 27.3% and your cost is 1,300.40 what is your sales price?
C/FC%=S 1,300.40/.273 move decimal back two spaces S= 4,763.37
If your food cost percent is 34.8% and your cost is 1,113.60 what is your sales price?
C/FC%=S 1.113.60/.348 move decimal back two spaces S=3,200.00
If your cost is 3.20 and your food cost percent is 40% what is your sales price?
C/FC%=S 3.20/.40 move decimal back two spaces S=8.00
If your food cost percent is 25.0% and your cost is 500 what is your sales price?
C/FC%=S 500/.250 move decimal back two spaces S=2,000.00
If your food cost percent is 24.5% and your cost is 88.20 what is your sales price?
C/FC%=S 88.20/.245 move decimal back two spaces S=360.00
if your food cost percent is 30.0% and your cost is 90.00 what is your sales price?
C/FC%=S 90/.300 move decimal back two spaces S=300.00
If your cost is 127.80 and your sales is 450.00 what is your food cost percent?
C/S=FC% 127.80/450.00=.284 move decimal over two places FC%=28.4%
if your cost is 150 and your sales is 500 what is your food cost percentage?
C/S=FC% 150/500=.30 move decimal over two places FC%=30.0%
If your cost is 178.50 and your sales is 700.00 what is your food cost percent
C/S=FC% 178.50/700=.255 move decimal over two places FC%=25.5%
If your cost is 200 and your sales is 500 what is your food cost percent?
C/S=FC% 200/500=.40 move the decimal over two places FC%=40.0%
If your cost is 216.80 and your sales is 800.00 what is your food cost percent?
C/S=FC% 216.80/800=.271 move decimal over two spaces FC%=27.1%
If your cost is 610.00 and your sales is 2,000.00 what is your food cost percent?
C/S=FC% 610/2,000=.305 move decimal over two places FC%=30.5%
Your Sale Price is 12.00 Your Cost is 5.00 Your Sales are 786,250.00 Your Variable costs are 275, 188.00 What is the unit and total?
CM=S-VC 12.00-5.00 Unit=7.00 786,250.00-275,188.00 Total=511,062.00
if your sales price is 17.22 and your variable cost is 6.98 and your food cost is 215,035.68, what is your break-even point in customers?
CM=SP-VC=17.22-6.98=10.24 CM=10.24 B.E.Pcust=FC+P/CM=215,035.68/10.24=21,000 round up for people B.E.Pcust=21,000 customers
if your sales price is 17.00 and your contribution rate is .60 and your food cost is 97,197.00 and your profit is 33,603.00 what is your break even point in number of customers?
CM=SPxCR=17.00x.60=10.20 CM=10.20 B.E.Pcust=FC+P/CM=97,197.00+33,603.00 =130,800.00/10.20=12,824 round up people B.E.Pcust=12,824 customers
if your sales price is 18.20 and your contribution rate is .60 and your food cost is 219,423.16 what is your break even point in customers?
CM=SPxCR=18.20x.60=10.92 CM=10.92 B.E.Pcust=FC+P/CM=219,423.16/10.92=20,094 round up for people B.E.P cust=20,094 customers
Your Variable Rate is .435 What is your Contribution Rate?
CR=1-VR CR=1-.435 CR=.565
If your variable rate is .40 and your sales price is 16.20 and your food cost is 129,425.36 and your profit is 44,000.00 what is your break even point in the number of customers?
CR=1-VR=1-.40=.60 CR=.60 CM=SPxCR=16.20 x .60=9.72 B.E.Pcust=FC+P/CM=129,425.36+44,000.00 =173,425.36/9.72 B.E.Pcust=17,843 customers
if your food cost is 155,410.31 and your variable rate is .45 what is your break even point in sales?
CR=1-VR=1-.45=.55 CR=.55 B.E.P$=FC+P/CR B.E.P$=155,410.31/.55=282,564.20 B.E.P$=282,564.20
if your food cost is 58,382.00 and your profit is 21,578.10 and your variable rate is .45 what is your break even point in sales?
CR=1-VR=1-.45=.55 CR=.55 B.E.P$=FC+P/CR=58,382.00+21,578.10=79,960.10/.55= B.E.P$= 145,382.00
If your sales price is 18.50 and your contribution margin is 10.08 what is your contribution rate?
CR=CM/SP CR=10.08/18.50=.545 CR=.545
If your Contribution margin is 10.72 and your sales price is 18.80 what is your variable rate?
CR=CM/SP=10.72/18.80=.57 CR=.57 VR=1-CR=1-.57=.43 VR=.43
if your food cost is 126,000 and your profit is 21,220 and your contribution margin is 9.29 and your sales price is 16.60 what is your break even point in sales?
CR=CM/SP=9.29/16.60=.56 CR=.56 B.E.P$=FC+P/CR=126,000+21,220=147,220/.56 B.E.P$=262,892.86
What are the disadvantages of the Periodic order method?
Can't prove waste, spoilage, and theft
Standard purchase specifications
Carefully written descriptions listing in appropriate detail the specific and distinctive characteristics that best describe an item to be purchased. Standard purchase specifications commonly identify grade, size, weight, degree of freshness, color, and other similar characteristics.
Your cost of an item is 1.00 Your Food Cost percentage is 20% what is your sales price?
Cost divided by the food cost percentage equals sale price. C/FC%=S 1.00/.20 move the decimal back two spaces S=5.00
historical
Data that has been recorded from the past data to assume the future. Documented costs, to use when evaluating prior expenses, forecasting, and comparing present with past.
Examples of variable costs
Food Beverage Labor Paper Chemical
Control
Food Beverage Labor A process used by managers to control, regulate, and restrain what happens in our restaurant. A process used by managers to direct, regulate, and restrain the actions of people so that the established goals of an enterprise may be achieved. Important use in a restaurant
What are prime costs?
Food Beverage Labor Payroll Materials
Examples of controllable costs
Food Beverage Labor Expenses in advertising, office supplies, postage, repairs, and maintenance
Food and beverage Transfers
Foods or beverages received by one cost center from another. The values of the foods or beverages transferred are normally recorded, and these values are used later for end of period adjustments.
Nonperishable foods
Foods that have a comparatively longer useful life than those known as perishables. Because of their longer useful life, nonperishable foods can be ordered less frequently than perishables and can be ordered in comparatively greater quantities.
Variable-Rate
Has to equal 100% The ratio of variable cost to dollar sales Variable Rate equals Variable cost divided by sales price VR=VC/S also 1-CR=VR CR+VR=100% always
Contribution Margin
Is the sale minus the variable cost. The amount resulting from the subtraction of variable cost from sales price. contribution Margin equals Sales (or per plate) minus Variable cost CM=S-VC
How does the perpetual inventory system work?
It's set to maximum, then it gets signed to a minimum, out goes to a room, reordered, put on shelf, and bounces back to maximum.
Quantity standards are:
Measures of weight, count, or volume used to make comparisons or judgements.
Periodic Order Method
Most common method used Amount required for the upcoming period - Amount currently on hand + Amount wanted on hand at the end of the period to last until the next delivery. = Amount to order
labor costs
Payroll costs, which includes salaries, wages, and employee benefits.
What are the two control systems?
Periodic and Perpetual
Which method gives more control?
Perpetual inventory because you have control proof of waste, spoilage, and theft, automatic reordering, costing out of recipes.
Planned
Projections of what costs should be, or will be, based on historical costs Budgeting
Examples of fixed costs
Property taxes Real estate taxes Insurance premiums Rent Depreciation of buildings and equipment Utilities
Quality of deliveries why is it important?
Quality of deliveries can not be verified by anyone unless he/she is completely familiar with the standard purchase specifications for the items received. The receiving clerk must have these for study and for reference.
What are the 3Q's
Quality- Determined by the specification. Insufficient quantities available for production, resulting in lost sales. Excessive quantities on hand, leading to waste, spoilage, pilferage, etc. Incorrect invoices due to receipt of quantities greater or less than ordered. Quantity- measured by weight and how much. Foods of improper quality used in production, resulting in products of quality other than specified, and probably at a cost other than planned. Foods required for production may not be available when needed if the freshness-an important element of quality has not been verified. Items may have spoiled before needed. Alternatively, some items may not be sufficiently ripe for use when needed: melons, tomatoes, bananas, etc. Quote- a matching quote that was given vs what's on the invoice. Incorrect invoice amounts, resulting in food costs other than those planned. Scales are obviously necessary for checking the quantity for those items ordered and billed by weight. Without sales, it's not possible to verify the weight of any item.
Examples of Non-controllable costs
Rent Interest on mortgage Real estate Taxes License fees
Sales Revenue
Resulting from the exchange of products and services for value.
sales price
Revenue resulting from the exchange of products and services for value. The dollar amount charged for each unit of any given product or service sold.
quality standards
Rules or measures established for making comparisons and judgments about the degree of excellence of raw materials, finished products, or work.
If your food cost percent is 31.6% and your sales is 1,065 what is your cost?
S x FC%=C 1,065 x .316 move decimal back two spaces C=336.54
If your food cost percent is 34.5% and your sales is 2,400 what is your cost?
S x FC%=C 2,400 x .345 move decimal back two spaces C=828.00
If your food cost percent is 24.8% and your sales is 225.00 what is your cost?
S x FC%=C 225 x .248 move decimal back two spaces C=55.80
If your food cots percent is 21.2% and your sales is 4,100 what is your cost?
S x FC%=C 4,100 x .212 move decimal back two spaces C=869.20
If your food cost percent is 29.7% and your sales is 790 what is your cost?
S x FC%=C 790 x .297 move decimal back two spaces C=234.63
If your variable cost is 6.20 and your Variable rate is .30 what is your contribution rate
SP=VC/VR SP=6.20/.30=20.67 SP=20.67 CM=SP-VC CM=20.67-6.20=14.47 CM=14.47
If your sales price is 16.20 and your contribution rate is .55 what is your contribution margin?
SPxCR=CM CM=16.20x.55=8.91 CM=8.91
Your Sale price is 5.00 your food cost percentage is 20% what is your cost of that item?
Sales multiplied by Food cost percentage equals the cost of the item. SxFC%=C 5.00x.20 move decimal back two spaces C=1.00
If your food cost percent is 28% and your sales is 500.00 what is your cost?
SxFC%=C 500 x .28 move decimal back two spaces C=140.00
What are the two operating budgets?
Static and Flexible
Actual cost percent
The Ratio of actual cost of sales to total sales for a given period
Reorder quantity
The amount of a particular item that will be ordered each time the quantity of that item diminishes to the reorder point.
Total
The cost as a whole. Cost of all food served in one period week, month, etc. Total cost of labor for one period.
Actual beverage cost
The cost of beverages sold as determined from inventory and purchase figures, with adjustments, if any, taken into account.
actual food cost
The cost of food sold, as determined by adding the cost of direct purchases to the cost of issues from inventory, calculated either from requisitions or from valuation of inventory. At the discretion of management, actual food cost may also take various adjustments into account.
unit costs
The cost of one or many like units, such as one portion of a particular menu item (e.g. one steak or one martini) or one hour of labor.
Cost per dollar of sale
The cost percent expressed as a dollar figure, or the ratio of cost to sales expressed as a dollar figure.
Food cost percent today/food cost percent to date
The daily and cumulative ratio of food cost to food sales as shown on various reports to management.
average contribution margin
The difference between average sale and average variable cost; the amount remaining after average variable cost is subtracted from average sale.
Unit
The division of cost into particular units. Per plate Per drink Unit of work Hourly rate of an employee
Beverage Cost
The expense to an establishment for beverages consumed, regardless of the reason. Beverage cost includes the cost of beverages sold, given away, stolen, and spilled.
Food cost
The expense to an establishment for food, incurred when food is consumed for any reason. Food costs includes the cost of food sold, given away, stolen, or wasted.
Control Process
The means employed by managers to institute control, consisting of four essential steps.
Unit sales required to break even
The number of average sales required to reach the break- even point
Contribution Rate (CR)
The percentage of the sales dollar available to cover fixed costs and profit. The percentage (expressed as a decimal) of the sales dollar available to cover fixed costs and profit. It is calculated by subtracting the variable rate from 1 (1- variable rate). Contribution Rate equals One hundred percent minus the Variable Rate CR= 1-VR also CR=CM/S CR+VR=100% always
Variable Rate
The ratio (expressed in decimal form) of variable cost to dollar sales.
average variable Rate
The ratio of average variable cost to average sale, normally expressed in decimal form.
food cost percentage
The ratio of food cost to food sales. The ratio of cost to sales, expressed as a percent.
Labor turnover rate
The ratio of the number of departing employees to the total number on the staff, expressed as a percentage.
Sales control
The several processes used by managers to optimize numbers of customers, to maximize profits, and to ensure that all sales result in appropriate revenue.
total cost
The sum of all unit costs for a given period of time.
Prime Cost
The sum of food cost, beverage cost, and labor cost for a given operating period.
Control Systems
The term used to describe that collection of interrelated and interdependent control techniques and procedures in use in a given food and beverage operation.
Variable-cost personnel
Those employees whose numbers and total cost increase or decrease as business volume increases and decreases.
directs
Those foods (typically perishables) charged to cost on the day they are received.
stores
Those foods added to inventory when received and charged to cost as issued
Perishable foods
Those foods, typically described as "fresh," that have a comparatively short useful life. Consequently, these must be ordered quite frequently and in relatively small quantities.
Average dollar sale
Total dollar sales for a period divided by the number of sales. Also referred to as average cover, average sale, average sale per cover, and average sale per customer.
average variable cost
Total variable cost for a period divided by the number of customers served in that period.
total sales
Total volume of sales revenue for a given period of time, expressed in terms of dollars or units.
Semiperishable
Typically foods, that have a short useful life after they have been received, but longer than perishables.
Cost Control
Used by managers to regulate costs and guard against excessive costs. Purchasing- how many to get Receiving- how to get it Storing- rotation Issuing- transfer money Preparing food Training of personal Scheduling of labor
Your Sale Price is 188,274 Your Variable rate is .435 What is your Variable cost?
VC=SxVR VC= 188,274 x .435 VC= 81,899.19
If your Contribution rate is .60 and your Variable cost is 3.60 what is your contribution margin?
VR=1-CR=1-.60=.40 VR=.40 CR=.60 VC=3.60 SP=VC/VR=3.60/.40=9.00 SP=9.00 CM=SP-VC=9.00-3.60=5.40 CM=5.40
If your Variable cost is 40,130.12 and your sales price is 64,726.00 what is your contribution rate?
VR=VC/S VR=40,130.12/64,726.00=.62 VR=.62 CR=1-VR=1-.62=.38 CR=.38
Your Variable cost is 402,375 Your Sales Price is 925,000 What is your Variable rate?
VR=VC/S VC (402,375)/S(925,000)=.435
If your Sales price is 19.25 and your Variable cost is 6.70 what is your variable rate?
VR=VC/S=6.70/19.25=.348 VR=.348
If your variable cost is 72,304.32 and your sales price is 164,328.00 what is your variable rate?
VR=VC/S=72,304.32/164,328.00=.44 VR=.44
if your variable cost is 5.85 and your sale price is 17.40 and your food cost is 164,065.60 what is your break even point in sales?
VR=VC/SP=5.85/17.40=.336 VR=.336 CR=1-VR=1-.336=.664 CR=.664 B.E.P$=FC+P/CR=164,065.60/.664= 247,086.75 B.E.P$=247,086.75
If your variable cost is 6.95 and your Sales price is 17.50 what is your contribution rate?
VR=VC/SP=6.95/17.50=.397 VR=.397 CR=1-VR=1-.397=.603 CR=.603
controllable costs
Variable- control related to volume. Can be changed in the short term. Variable costs are normally controllable. A cost that can be changed by management in the short term. Examples include food cost, beverage cost, and labor cost. The process used by managers to regulate costs and guard against excessive costs.
How do you get Break Even Point B.E.P?
When Dollar Sales are sufficient to cover both fixed and variable costs exactly, but insufficient to provide any profit. Is the point on which you cover exactly all of your fixed and variable expenses but you don't make any profit. The point at which the sum of all costs is equal to sales so that profit equals zero. An equation stating that sales are equal to the sum of variable costs, fixed costs, and profit (or loss). B.E.P= Break-even Point You take the Variable cost and add it to the fixed cost and add that to the profit. B.E.P$= Variable cost + Fixed cost + Profit Cost of Sales + Cost of Labor + Cost of Overhead + Profit B.E.P$= VC+ FC+P divided by CR Contribution Rate P=0 Profit equals 0
Is Contribution Margin profit?
Yes and No. Not profit until after you cover all your fixed expenses or hit the B.E.P once you brought enough CM to hit the B.E.P then the next CM income is profit. CM= becomes profit after you hit the B.E.P Margins are important because they tell you how many dollars are coming off each entree but, you have to keep adding that money up until you get the B.E.P and then the next margin goes after the B.E.P., it covers overhead expenses, and then you get profit.
How do you get Food Cost percentage?
You divide the cost of the item by the item's sales price to get the item's food cost percentage.
How do you get the sales price?
You take the cost of the item and divide it by the food cost percentage to get the item's sale price.
How do you get the cost?
You take the sales price and multiply it by the food cost percentage to get the cost of that item.
Your Fixed Cost is 416,250 Your Contribution rate is .565 What is your Break Even Point in dollar sales B.E.P$
Your profit is always zero unless said otherwise B.E.P$=FC+P/CR B.E.P$=$416,250+0/.565 B.E.P$=$736,725.66
Fixed Cost
a cost that does not change, no matter how much of a good is produced A cost that is normally unaffected by changes in sales volume; a fixed cost does not increase or decrease significantly as business volume changes and thus is said to have a little direct relationship to the volume of business. Those employees whose numbers do not normally change because of increases and decreases in the volume of business. Changes in their numbers are unlikely unless there are extraordinary changes in volume over an extended period. Noncontrollable, it doesn't change with sales Unaffected (normally) by change in sales volume.
Variable Cost
a cost that rises or falls depending on how much is produced Controllable, does change with sales Clearly related to business volume. Variable cost equals Sales Price multiplied by the variable rate of an item VC=SxVR
Non-controllable costs
costs incurred indirectly and allocated to a responsibility center that are not controllable at that level. Cannot be changed in the short term. A cost that management can not change in the short term. Examples include rent, real estate taxes, and license fees. Fixed
flexible budgeting
has revenue built into it when revenue goes up and down you're allowed to spend less or more. Multiple levels- above and below A budget prepared for more than one level of business activity.
Cost
is an expense we incurred to generate revenue. The expense incurred for goods or services when the goods are consumed, or the services rendered.
static budgeting
is one that has no revenue and is simply an expense account when it's gone, it's gone. One level
Profit
is the excess over or above what it takes to get B.EP. The excess of revenue over outlays in a given period of time.
Direct Compensation
salaries, wages, tips, bonuses, and commissions
Perpetual levels and preorder points determine what?
when and how much you need to buy
