Chapter 2 Cost And Sales Concept) Flashcards
(35 cards)
Define cost
Cost is the value of money that has been used up to produce something or deliver a service,
What is cost labor
the amount paid by an employer to cover an employee’s wages and benefits, plus related payroll taxes and benefits date.
How can labor cost be expressed
Labor costs can be expressed as value per hour or value per week
List the different types of costs
Fixed cost
variable cost
Controllable cost
Non-controllable costs
Prime cost
Historical and planned costs
Define Fixed cost
They are expenses that stay the same no matter how much activity a business is doing.
Give examples of fixed costs
Insurance premiums
real estate taxes
salaries
depreciation on equipment
Repairs and maintenance
Most utility costs
And costs of professional services
Variable costs
A cost that increases or decreases based on the business volume
examples of variable costs
examples of variable costs are food,
beverages, and labor
Food and beverage costs (directly variable cost)
Food and beverage costs are considered directly variable costs. Directly
variable costs are directly linked to volume of business, so that every
increase or decrease in volume brings a corresponding increase or decrease
in cost.
Semi veriable cost
It contains both fixed and veriable costs
Controllable
costs
Controllable
costs can be changed in the short term.
For example changes in food and beverage and labor
noncontrollable costs
noncontrollable costs cannot normally be changed in the
short term. These are usually fixed costs. It include rent, interest on a mortgage, real estate taxes, license fees, and
depreciation.
Unit price
the price for a single unit of measure of a product sold in more or less than the single unit
Prime cost
prime cost is defined as the sum of food costs,
beverage costs, and labor costs
Historical and planned costs
Historical costs are used for various important purposes,
such as establishing unit costs, determining menu prices, and comparing
present with past labor costs.
historical costs are necessary for effective planning.
two basic groups of terms normally
used in food and beverage operations to express sales concepts
monetary
and nonmonetary sales
Monetary sales includes:
Total sales
Total sales by category
Total sales per server
Total sales per seat
Sales price
Average sales
Average check
Average sales per server
Define total sales
the total volume of sales expressed in dollar terms.
Total Sales measures the total revenue generated from all sales transactions
Total Sales by Category
Total dollar sales by category refer to the total dollar volume of sales for all items in one category, such as total food sales or total beverage sales
Total Sales per Server
Total Sales per Server: Total sales per server is the total dollar volume of sales for which a given server has been responsible in a given time period, such as a meal period, a day, or a week
Total Sales per Seat
Total sales per seat is the total dollar sales for a given time period divided by the number of seats in the restaurant, typically used for annual comparisons.
It is calculated by dividing the total revenue earned in a given period (usually a day, week, or month) by the total number of guests served during that same period
Sales Price
Sales Price: Sales price refers to the amount charged to each customer purchasing one unit of a particular item, which contributes to the total dollar sales for that time period.
Average Sale
Average Sale: An average sale in business is determined by adding individual sales to determine a total and then dividing that total by the number of individual sales, with common measures being average check and average sale per server
calculated by dividing the total revenue earned by the total number of units sold
Average check
Average check is the result of dividing total dollar sales
by the number of sales or customers
the amount a customer spends on a single visit to your business
