F&BCONTROLSDefinition of CostAccountants define a cost as a reduction in the value of an asset for the purpose of securing benefit or gain. That definition, although technically correct, is not very useful in a basic discussion of controls, so we will modify it somewhat. As we use the term in our discussion of cost control in the food and beverage business, cost is defined as the expense to a hotel or restaurant for goods or services when the goods are consumed or the services are rendered. Foods and beverages are considered consumed when they have been used, wastefully or otherwise, and are no longer available for the purposes for which they were acquired. Thus, the cost of a piece of meat is incurred when the piece is no longer available for the purpose for which it was purchased, because it has been cooked, served, or thrown away because it has spoiled, or even because it has been stolen. The cost of labor is incurred when people are on duty, whether or not they are working and whether they are paid at the end of a shift or at some later date.The cost of any item may be expressed in a variety of units: weight, volume, or total value. The cost of meat, for example, can be expressed as a value per piece, per pound, or per individual portion. The cost of liquor can be expressed as a value per bottle, per drink, or per ounce. Labor costs can be expressed as value per hour (an hourly wage, for example) or value per week (a weekly salary).CONTROLControl is 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. If one intends to institute control in an enterprise, an obvious first step is to establish appropriate goals for the enterprise. Probably the most common goal for all private enterprises is financial success, although this is by no means the only long-range goal of businesses. Other goals may include operating the best restaurant in the city, providing adequate health insurance for employees, preserving the environment, promoting better health by providing nutritional information in the menu, or aiding in the integration of minority groups into national economic life. To achieve these goals, management must set up any number of subgoals compatible with its long-range plans. These tend to be more specific and usually more immediate in nature. For example, to achieve the goal of operating the best restaurant in the city, it would be necessary to make plans to hire an excellent chef and to purchase the finest ingredients. A discussion of general business goals and the planning required for achieving them is beyond the scope of a text on cost control. On the assumption that appropriate goals have been established, the discussion here is restricted to the control procedures employed by foodservice managers to achieve one basic goal of business: operating profitably. Therefore, the focus is on establishing control over costs and sales in food and beverage operations. Attention is centered on the particular methods and procedures used by foodservice managers to direct, regulate, and restrain the actions of people, both directly and indirectly, to keep costs within acceptable bounds, to account for revenues, and to earn a profit inthe process.Cost Control

Cost control is defined as the process used by managers to regulate costs and guard against excessive costs. It is an ongoing process and involves every step in the chain of purchasing, receiving, storing, issuing, and preparing food and beverages for sale, as well as training and scheduling the personnel involved. The particular methods used to control costs vary from one establishment to another, depending in part on the nature and scope of operations, but the principles behind these methods are constant. The obvious objective is to eliminate excessive costs for food, beverages, and labor to exert some governing power over costs in all areas to ensure that the enterprise will operate at a profit. Two of the principal causes of excessive costs are inefficiency and waste. For example, storing food in refrigerators that are not cold enough or bottled beer in a warm, sunny room will cause spoilage and excessive cost. So will the preparation of an inedible beef stew or an unpalatable drink. When the stew is thrown into the garbage can or the drink poured down the drain, the costs of operationare increased, but sales are not. Because profit is essentially the difference between sales and costs, it is apparent that any increases in cost that do not lead to corresponding increases in sales can have only one effecta reduction in profits. Clearly, management must take steps to guard against such excessive costs.

Sales ControlAlthough cost control is critically important to the profitable operation of any business, cost control alone will not ensure profitability. Additional steps must be taken to ensure that all sales result in appropriate income to the business (sales control). For example, profits will be adversely affected if a steak listed in the menu for $18.95 is sold to a customer for $15.95 or if the drink priced to sell for $4.50 is sold for $2.50. Therefore, it is important to require thateach employee record each sale accurately. In addition, it is useful to compare sales records to production records to ensure that all quantities produced are accounted for. Although it is unfortunate that some employees are not completely honest, it is a fact of life that must be taken into account in food and beverage operations. Therefore, guest checks are usually numbered to ensure accountability. Sometimes duplicate copies of the checks, clearly identified as duplicates so they are not confused with the originals, are used to reconcile kitchen production with recorded sales. When the checks and duplicates are numbered sequentially, missing numbers can be noted and investigated at once. Establishments that use industry-specific computer programs find that control is much easier to institute than those without such programs. For example, this chapter illustrates one such program that makes it very difficult for menu items to be priced incorrectly, and makes it very easy to reconcile kitchen production with recorded sales. A number of other techniques will be discussed in which includes a more thorough treatment of this complex topic.

Responsibility for Control

Responsibility for every aspect of any food and beverage enterprise rests with management. Control, therefore, is clearly a responsibility of management. In some food and beverage enterprises probably the majoritymanagers take personal charge of directing and supervising the control procedures in every phase of operations. In others, managers delegate some or all of the work to subordinates. The nature, size, and scope of operations help determine the extent to which managers can exercise direct control rather than delegate responsibility. In general, the larger and more complex the operation, the more likely it is that control procedures willbe supervised by subordinates. Job titles for these subordinates include food controller, beverage controller, assistant manager, supervisor, and a number of others. Throughout this text, several job titles are used for those having responsibility for supervising food, beverage, or labor control procedures. In the majority of food and beverage enterprises, one is likely to find control procedures supervised directly by managers, so that title is used most often. In larger operations, one may find food controllers and beverage controllers. Today, there are comparatively few of these, but the job titles are still useful in discussions of control principles and will appear in various chapters. Because food and beverage operations are so varied, it is impossible to identify with any precision the job titles of those responsible for specific controls in a particular type of food and beverage operation. The use of one job title rather than another in this text is not intended to suggest that any particular task should be assigned to any particular job title. In that sense, the specific job titles used are of little importance. The significant point is that management is ultimately responsible for seeing that appropriate control procedures are established, either by attending to the work personally or by assigning it to others.

Instituting ControlThe food and beverage business can be characterized as one that involves raw materials purchased, received, stored, and issued for the purpose of manufacturing products for sale. In respect to these functions, there are many similarities between the food and beverage business and other manufacturing businesses. For example, consider the steps involved in the production of wood furniture. The furniture manufacturer must determine the kinds of wood that are best suited to the types of furniture to be manufactured and must purchase appropriate quantities of lumber at favorable prices. When the wood is delivered, the shipment must be checked to ensure that the material delivered is exactly as ordered. Then itmust be moved into appropriate storage facilities, partly to prevent theft and partly to ensure that the characteristics of the wood will not be adversely affected by climate. The wood must then be issued in appropriate amounts for the production of various kinds of tables and chairs. During the manufacturing process, some effort must be made to maintain balanced quantities of parts so that, for example, one tabletop is made for each four legs. After the tables have been manufactured and sold to customers, care must be taken to ensure that each sale is properly recorded, that the correct price is charged for each table sold, and that the total dollar value of each sale is collected. The motel coffee shop, the school cafeteria, the hotel dining room, the resort cocktail loungeall share with manufacturing businesses (such as the aforementioned furniture manufacturer) the need for purchasing, receiving, storing, and issuing raw materials for the production of finished products for sale. In food and beverage operations, we deal with fruits, vegetables, meat, poultry, and a large number of other foodsfresh, frozen, and cannedas well as alcoholic beverages in many establishments, but these really serve the same purposes in our business that wood serves in the furniture manufacturing business.In both businesses, raw materials must be carefully selected, always with the desired final products in mind, and appropriate quantities of each must be ordered to meet expected production needs. In either case, any order for raw materials should be placed with the vendor who will sell the materials at the most favorable price. As materials are received, they must be checked to see that the business is getting what it pays for. Then the materials must be stored appropriately until needed. When the person in charge of production requests materials from storage, the materials needed must be made available for the production of finished items for sale. At each stage of operation, it is necessary to institute control in order to prevent the kinds of problems mentioned earlier. Control may be accomplished in a variety of ways, and anyone who attempts to manage a food and beverage operation should be aware of the range of techniques available. The particular techniques selected for use in a given situation depend on the nature of the material or service requiring control and on the degree of difficulty inherent in instituting such control. Thus, deciding on the appropriate control technique to adopt in a given situation is not always simple. Some of the more common techniques are discussed in the following paragraphs.

Control Techniques The control techniques available to a manager include the following:1. Establishing standards2. Establishing procedures3. Training4. Setting examples5. Observing and correcting employee actions6. Requiring records and reports7. Disciplining employees8. Preparing and following budgets.Food Purchasing ControlIntroduction All foodservice businesses, regardless of size or type, have certain processes in common. Whether the foodservice business is a fastfood restaurant or a fine dining establishment, it must purchase supplies from purveyors either by phone, computer e-mail or Web page, fax, letter, or from a salesperson who calls at the establishment. Both types of establishment must receive the supplies when they arrive, and someone must verify that the quantity, quality, and price are the same as ordered. The food must be put away in dry storage, refrigerator, or freezer. When needed, the food must be taken from storage and prepared for customers who order it. Finally, the food must be served to them.

All foodservice establishments, then, have the following sequenceof operation: Purchasing Receiving Storing Issuing Producing Selling and serving

In each of these steps it is possible for unwanted and unwarranted costs to develop. For example, a purchasing steward can order more of an item than he should, resulting in excess supplies that go bad before they can be used. Food can be improperly stored so that it spoils prior to production. The cooks can prepare food badly so that it cannot be served and must be thrown out. In each of these instances, excessive costs are incurred and profit suffers.This chapter deals with measures that can be taken to prevent unnecessary cost from developing in purchasing. Succeeding chapters discuss measures to prevent excessive cost in receiving, storing, issuing, production, and sales.

Responsibility for Purchasing Responsibility for purchasing can be assigned to any one of a number of persons in foodservice operations, depending on organizational structure and management policies. It is not uncommon to find owners or managers taking the responsibility in some establishments, whereas in others the purchasing duties may be assigned to a chef or a steward. In some hotel/motel operations, foods may even be ordered by someone in a purchasing department who has responsibility for purchasing all supplies used in the property.

To facilitate discussion at this point, responsibility for food purchasing is arbitrarily assigned to a steward. This does not mean that the author believes that this responsibility should always be given to a steward; on the contrary, the determination of who should be assigned responsibility for food purchasing must be based on the situations and conditions existing in the specific foodservice operation. The important point here is that, for control purposes, the authority to purchase foods and the responsibility for doing so should be assigned to one individual. That individual can then be held accountable for the system of control procedures established by the food controller.

Control Process and Purchasing Control was defined as 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. The control process was identified as a four-step approach, requiring that standards and standard procedures be established, that employees be trained to follow those standards and standard procedures, that employee output be monitored and compared with established standards, and that remedial action be taken as needed. This is a general process that can be applied to the control of any activity in foodservice or in any other business. The objective in this chapter is to apply the control process to the task of purchasing food.

Perishables and Non perishables The types of foods to be purchased for any foodservice enterprise can be divided into two categories: perishables and non perishables. Because there are significant differences between the approaches to purchasing foods in these categories, it is important to differentiate between them. Perishable foods are those items, typically fresh foods, which have a comparatively short useful life after they have been received. Various kinds of lettuce and fresh fish, for example, begin to lose their quality very quickly. Some meats and cheeses will retain their quality for somewhat longer periods, but the quality of these perishables will begin to deteriorate much sooner than will the quality of non perishablescans of tomato puree, for example. Perishables, then, should be purchased for immediate use in order to take advantage of the quality desired at the time of purchase. If a steward is always careful to purchase the best quality available for intended use, it would be wasteful and costly not to make use of that carefully selected quality.Nonperishable foods are those food items that have longer shelf lives. Frequently referred to as groceries or staples, they may be stored in the packages or containers in which they are received, often on shelves and at room temperature, for weeks or even months. They do not deteriorate quickly as long as they are unopened and kept at reasonable temperatures. Non perishables are typically purchased and stored in jars, bottles, cans, bags, and boxes; the storage area in which they are kept, usually called a storeroom, would resemble the shelves of a supermarket to the layman. Because these foods do not deteriorate quickly, it is possible to keep a reasonable supply of them on hand, for use as needed. For example, a restaurant that uses an average of four No. 10 cans of whole, peeled tomatoes daily (more than four cases per week) can keep a supply of eight cases on hand without running any risk of spoilage. Foods that typically fall into this category of non perishables include salt, sugar, canned fruits and vegetables, spices, and flavorings.

Developing Standards and StandardProcedures for Purchasing The primary purpose of establishing control over purchasing is to ensure a continuing supply of sufficient quantities of the necessary foods, each of the quality appropriate to its intended use, purchased at the most favorable price. Therefore, we will discuss purchasing from this point of view, first by establishing the essential standards and standard procedures for effective purchasing. Standards must be developed for the following: Quality of food purchased Quantity of food purchased Prices at which food is purchased

Establishing Quality Standards Before any intelligent purchasing can be done, someone in management must determine which foods, both perishables and non perishables, will be required for day-to-day operations. The basis for creating a list of these foods is the menu. However, this is not as easy as it may at first appear. For example, most restaurants use tomatoes and tomato products for a variety of purposesas salad ingredients, as sauce ingredients, and so on. At the same time, tomatoes and tomato products are available for purchase fresh and processed, and in various grades. Before purchasing, important decisions must be made about brands, sizes, packaging, grades, and degree of freshness, among other things. Developing a complete list of foods and their characteristics for a foodservice operation is clearly a complex and time-consuming enterprise. It must be done, however, if one is to establish effective control over purchasing. If a restaurant is to produce products of consistent quality, it must use raw materials of consistent quality. Therefore, it is important that the food controller, in cooperation with other members of the management team, draw up the list of all food items to be purchased, including those specific and distinctive characteristics that best describe the desired quality of each. These carefully written descriptions are known as standard purchase specifications. These specifications are often based on grading standards established by the federal government or, in some instances when federal grading standards are considered too broad, on grading standards common in the appropriate market.However, foodservice operators are not restricted to these possibilities. Many write specifications that are far more precise and thus more useful for indicating to purveyors the exact quality desired.Once these standard purchase specifications have been developed, they can be printed and distributed to potential purveyors to ensure that each fully understands the restaurants exact requirements.Figure 4.1 gives five examples of standard purchase specifications. Standard purchase specifications, if carefully prepared, are useful in at least six ways:

They force owners or managers to determine exact requirements in advance for any product. They are often useful in menu preparation: It is possible to use one cut of meat, purchased to specifications, to prepare several different menu items. They eliminate misunderstandings between stewards and purveyors. Circulation of specifications for one product to several purveyors makes true competitive bidding possible. They eliminate the need for detailed verbal descriptions of a product each time it is ordered. They facilitate checking food as it is received. (The importance of this is discussed in Chapter 5).

Although specifications are written at one particular time, they need not be considered fixed for all time. If conditions change, they can be rewritten and recirculated. Stewards who use computers have an easier time rewriting specifications. They simply need to bring up a specification on the monitor and make the necessary changes.

This critically important stepthe determination of quality standards and the development of standard purchase specificationshelps to ensure that all foods purchased will be of the desired quality for their intended use.

Establishing Quantity Standards

Although purchase specifications can be established at one particular time and merely reviewed and updated on occasion, quantity standards for purchasing are subject to continual review and revision, often on a daily basis. All foods deteriorate in time, some more quickly than others, and it is the job of the food controller to establish a system to ensure that quantities purchased will be needed immediately or in the relatively near future. In cooperation with the steward, the food controller does this by instituting procedures for determining the appropriate quantity for each item to be purchased. These procedures are based principally on the useful life of the commodity.

For purchasing purposes, foods are divided into the two categories previously discussed: perishables and nonperishables. The procedures for determining their purchase quantities differ from one another and are discussed separately.

PerishablesThe very nature of perishable products suggests the importance of always using up those already on hand before purchasing additional quantities. Therefore, the purchasing routine must provide for determining quantities already on hand. Decisions must also be made as to total quantities needed. Once these amounts have been arrived at, the difference between them is the correct amount to order.There is a term commonly used in industry for the quantity needed: par, or par stock. Although it is generally acknowledged that par stock is a number of units related to usage and the time needed to get delivery, there is no general agreement on an exact definition of the term. Because the term is used in a variety of ways in the industry, one should be aware of some of its more common uses. In some places, par stock is taken to mean the maximum quantity of a given item that should be on hand after the most recent order has been received. In others, it means the quantity that should be on hand at all times. Still another possibility is to treat par stock as a range defined by maximum and minimum quantities between which the actual quantities on hand should vary. For purposes of this discussion, par stock is defined as the quantity of any item required to meet anticipated needs in some specific upcoming period.

A basic requirement of the purchasing routine is that the steward take a daily inventory of perishables. In some cases, this daily inventory may be an actual physical inventory. In others, it may be only an estimate based on physical observation. For example, the steward would probably count the actual number of ribs of beef, but only estimate the quantity of chopped beef. Or the steward may count the avocados, but count only the cases of lettuce. A very important and useful tool for the steward to employ in taking this daily inventory is a standard form called the Stewards Market Quotation List, partially illustrated in Figure 4.2. A similar form, generally available from stationers who cater to the hotel and restaurant industry, is a list of the most common perishables, arranged by types, with several blank lines provided for the special requirements of each restaurant. Foodservice operators who have incorporated computers into the purchasing routine can readily prepare their own, as shown. Doing so makes it possible to limit the number of items on the form to those used by the establishment and to easily add and subtract items as the need arises. If the forms are computer-generated, a steward can also have separate sheets for different food groups: one for meat, another for dairy, and so on.To take the daily inventory of perishables, the steward goes through refrigerators and freezers with the form in hand and, next to the appropriate items in each category, fills in the column on the left marked On Hand. After completing this survey, the steward has a relatively accurate inventory of perishable products. The next step in the routine requires that a determination be made as to anticipated total needsin effect, par stocksfor each item, based on future menus, and often on experience as well. Depending on the establishment, the total anticipated needs can be determined by anyor a combinationof several key personnel chef, manager, or steward. If the computer form illustrated in Figure 4.2 is used, the par stock figure for total anticipated needs is written in the Par column.Then, for each required item, the steward subtracts the amount on hand from the par figure to determine the proper order quantity. This difference is the amount that should be ordered to bring supply up to the total quantity required. This amount is written in the To Order column at the right.Referring to the Stewards Market Quotation List illustrated in Figure 4.2, for example, one assumes that legs of lamb are on the menu and that a total of 12 legs will be required to meet the anticipated demand. This number is recorded in the Par column. Because the daily inventory indicates 2 legs, written in the On Hand column, the quantity to be purchased is 10 legs, recorded in theTo Order column, and is found by subtracting the quantity on hand (2 legs) from the established par stock (12 legs).

Nonperishables

Although nonperishable foods do not present the problem of rapid deterioration, they do represent considerable amounts of money invested in material in storage. Obviously, cash tied up in nonperishables is not available to meet other operating expenses of the business. Therefore, one goal of the purchasing routine for nonperishables should be to avoid having excessive quantities on hand. Additional benefits to be derived from reducing quantities on hand include the elimination of some possibilities for theft, the reduction of storage space requirements, and possibly the reduction in the number of personnel required to maintain the storage area. An important step is to fix labels on shelves in every storeroom. The purpose of doing so is to establish a permanent location for each item in the inventory. With locations for food products thus established, no product should ever be found in more than one location at once. Without labels and fixed locations for products in storage, products are often stored in several different locations, which make it more difficult for the steward to know the actual quantity on hand. When this is the case, there is a tendency to order additional quantities in the erroneous belief that stock is running low. Another benefit of identifying fixed locations for products is that this practice makes it easier to find things when regular personnel are off duty or when personnel change. For the convenience of stewards, a form can be obtained from some stationers that lists nonperishables, just as the Stewards Market Quotation List itemizes perishables. This form is not widely used, however, because lists of groceries are not as universally applicable as lists of perishables. Stewards prefer to make up their own lists of storeroom contents. These serve the same purpose: to itemize amounts to be ordered and competitive prices. Although there are undoubtedly a number of ways to maintain inventories of nonperishables at appropriate levels, most are variations on two basic methods:

1. Periodic order method2. Perpetual inventory method

Periodic Order Method. Perhaps the most common method for maintaining inventories of stores at appropriate levels is the socalled periodic order method, which, in contrast to methods for ordering perishables, permits comparatively infrequent ordering. Because nonperishables have longer shelf lives than perishables, it is both possible and desirable to order them less frequently. By doing so, the steward has more time available for ordering perishables, which typically require considerable attention. When the periodic order method is followed, a steward normally establishes, with the advice of management, regular dates for ordering with fixed intervals between them. Then, on a regular basisonce every week, every two weeks, or even once each month, depending on storage space available and the policies of management as to the amount of money to be tied up in inventorythe steward reviews the entire stock of nonperishable items and determines how much of each to order to ensure a supply sufficient to last until the next regularly scheduled order date. The calculation of the amount of each item to order is comparatively simple: Amount required for the upcoming period Amount presently on hand Amount wanted on hand at the end of the period to last until the next delivery Amount to order An example can illustrate how the system works. In the SpringfieldRestaurant, where orders are placed on the first Monday ofeach month, one of the nonperishable items ordered is pineappleslices, purchased in No. 2 cans, packed 24 cans to a case. The itemis used at the rate of 10 cans per week, and delivery normally takesfive days from the date an order is placed. If the steward in thisestablishment found 12 cans on the shelf, anticipated a normal useof 40 cans during the upcoming period of approximately fourweeks, and wanted 15 cans on hand at the end of that period, thecalculation would be40 cans required_ 12 cans on hand_ 15 cans to be left at the end of the month_ 43 cans to be ordered on this dateHowever, because orders are normally placed for this item in cases rather than in cans, the steward would probably round the order up to the next highest purchase unit, placing an order for two cases, consisting of 48 cans. Although rounding an order upwardin this way appears at first glance to be overpurchasing, in fact the steward is subtracting quantities on hand at the beginning of each period before placing the orders. For this reason, the small overpurchases resulting from rounding up orders will be taken into account before order quantities are determined for the following period.

In effect, the order for the next period is reduced by the amount of the small overpurchase in the current period. One may ask how the steward would know the quantity of an item required for an upcoming period. Storerooms have hundreds of items, and it is impossible for a person to know, without records, the total quantity required for each item in the inventory. In some smaller operations, stewards simply guess, knowing that each subsequent order date will provide an opportunity to improve the accuracy of the figures. In others, experienced stewards get to know and remember the approximate quantities used in a period and keep this in mind when ordering. In some establishments that rely on a single supplier for most of their needs, stewards may seek help from the supplier, who keeps records of previous orders. With that information, the steward can look on the storage shelf and make an approximate determination of the amount used by subtracting the quantity remaining from the quantity last ordered. Although such informal methods are probably better than ignoring usage entirely, one must keep in mind that they all fail to take into account the amount on hand at the beginning of any period.Nevertheless, these informal methods are not uncommon in the food and beverage industry.A more systematic method of determining usage requires that certain additional steps be taken. For establishments without computers, a desirable first step is to make shelf labels more useful by including additional information on them. For example, if a label is somewhat larger than standard size, it is feasible in many establishments to record the quantities added to and taken from shelves right on the label. When used in this form, such labels are known as bin cards, an example of which is shown in Figure 4.3.As each delivery is received and placed on the shelf, both the date and number of units so placed are entered on the bin card. As quantities are issued for use, those dates and amounts are recorded as well. More spaces are provided for items issued than for items received, for the obvious reason that purchases are comparatively infrequent but issues may occur daily. A balance column is provided so that a steward can determine and enter amounts on hand at any desired time, such as when a salesperson calls or when the periodic ordering date arrives. At such times it is quite simple to determine approximate usage by looking on the card for the balance on hand on the date the last order was placed, adding to that figure the number of units placed on shelves when the last order was received, and subtracting the balance currently on hand. The result will be the approximate usage in the most recent period, regardless of the length of that period.The assumption is made that this quantity was used productively, although this may not always be the case and should be considered in determining the amount to order for the next period.

Q. 1. What do you mean by costing? Process of ascertaining costs or in other words it is primarily concerned with record keeping directed towards the preparation of profit and loss account and balance sheet at periodic intervalsQ. 2. Write in brief the advantages of controlling food cost?Food cost is the major portion of the total cost. A slight upward variation of food cost can adversely affect the profit and a slight downward variation of food cost can adversely affect the portion size and quality of food. The most important advantage of food cost control is that the hotel makes reasonable profit without affecting the standard recipe and hence the sale is also ensured to be improved. Q. 3. Explain in brief the obstacles to food and beverage control.: Obstacles to food and beverage control:-1. Unpredictability of volume of business-a) Sales instability is part & parcel of any catering establishment so it becomes impediment for calculation of food cost.b) Turnover of business is different in season than in off season.

2. Perishability of food The cost of the basic raw material varies from season to season. The cost of each unit becomes less in case ordered in bulk. So the raw material (food stuff) which is perishable should not be overbought. But at times it becomes difficult to do so as volume of business is unpredictable in catering operations.Q. 4. Explain the limitations of food cost control. It looks very simple that if the standard recipe and portion size control is followed then the food cost will be always be under control. In actual, in spite of following standard recipe and portion size, the food cost may differ. The following factors affect the food cost, which may or may not be under the direct control of the Chef and the Management.1. Fluctuation in Raw Material Cost.2. Wrong Purchasing of Raw Material3. Reduction in Sale4. Wastage during preparation of Food5. Pilferage in Food Sale6. Spoilage due to wrong storage.Q. 5. Explain in detail Break Even Point (B.E.P.). Break Even Point (B.E.P.) is the point of sale at which one makes neither profit nor loss. In other words, it means that the sale is equal to the total cost. Q. 6. What do you mean by Cost? How will you classify the different cost? The cost of a product is the total cost incurred to produce the good. This does not include the profit. The selling price should be cost + desired profit. The cost can be classified / grouped in various ways depending upon their nature, elements, function, controllability, etc.The cost can be grouped as under:1. Variability (Fixed Cost, Variable Cost and Semi Variable Cost)2. Controllability (Controllable Cost and Uncontrollable Cost)3. Functions (Production Cost, Administration Cost, Selling Cost and Distribution Cost)4. Normality (Normal Cost and Abnormal Cost)5. Generally Accepted Cost (Food Cost, Labour Cost and Over heads)

Q. 7. Explain the importance of Place for everything and everything in place. All raw material received must be stored at a proper place. It is a saying that in stores there should be, a place for everything and everything in place. This helps in storing the material quickly and quickly the material can be taken out for issuing. This also helps in reducing the breakage as things are properly stacked at proper place.Q. 8. Explain First in First out. All goods should be issued after a proper requisition. The store keeper must follow the rule of First in First out (F.I.F.O), which means the goods received first are issued first. This helps in reducing the spoilage. Since the goods received first are issued first so the goods left in the store are fresh and can be stored and issued subsequently without being spoiled.Q. 9. Draw a Flow Chart of Food and Beverage Control. Q. 10. Give the format of Beverage Order Ticket.Q. 11. Visitors Tabular Ledger is also called as Day Book.Q. 12. . Draw the format of the purchase order Q. 13. Write in brief the numerous methods of purchasing.The following are the methods of purchasing:-1. Contract purchasing2. Purchasing through quotations3. Cash purchases4. Purchasing through tenders5. Centralized purchase6. Periodical purchase.

Q. 14. List the numerous equipments required by the receiving department. Major Equipments are:-1. Various weighing scales2. Conveyer belt3. Fork truck4. Cranes5. Trolleys6. Lift7. Stout Ladder8. Ultra violet ray lamps or sun lamps for helping in quick ripening of vegetables and fruits.

Minor Equipments are:-

1. Racks2. Scientific Equipments to inspect the quality of goods3. Table and chair4. Telephone and intercom5. Filling racks

Q. 16. What do you mean by Bin Card? Bin cards are prepared for each item stored in the store. It contains the description of the item, balance of the item, quantity of goods received, the quantity of goods issued and the balance of the item which are shown on daily basis. It also shows the minimum stock, reordering point / level, maximum stock, danger point / level and economic ordering quantity. The bin cards are either kept along with each item or they are stored near the store keepers working table.Q. 17. What are the different methods for pricing non-perishable items? Different methods for pricing non-perishable items are:-1. Actual Purchase Price / Procurement Price.2. Average price3. Weighted average price4. LIFO5. FIFO6. Higher price / Inflated price7. Standard price.

Q. 19. How will you control empty bottles? Usually hotel pays security for empty bottles, racks, crates, etc to the suppliers. A strict control on the movement of these is kept. Stores issue fresh bottles, crates against the empty bottles, crates, etc. While taking inventory of bars / stores, the control department also checks the empty bottles, racks, crates, etc. For this purpose Empties Return Book is maintained.

Q. 20. Explain cyclic menus. When the same guests are served meals (breakfast, lunch, dinner, etc.) on daily basis then the cyclic menus are prepared. Usually hostels have weekly cyclic menus. Seven menus for breakfast, lunch and dinner are made and served during the week. While planning the cyclic menus, the nutritive requirements of the guests, availability of the raw material, cooking equipments, chefs abilities, cost / price factors, service facilities and equipments available, etc. are kept in mind. Usually the food items are not repeated in the cyclic menus and the taste of the guests is very important while planning the cyclic menus.

Q. 21. Describe in detail standard recipe. The standard recipe means the basic raw material, method of cooking, presentation of the dish, accompaniments offered; portion size, etc. are of the same proportion every time the dish is served. In good hotels, the chef prepares the standard recipe, takes its photograph along with the method of cooking and the standard portion of the ingredients and displays at prominent place in the kitchen. Even when the chef is not present and if the dish is to be prepared by any other cook then the look of the dish, its presentation, portion size, taste, etc. will the same and this will help in guests satisfaction.

Q. 22. . Write in detail the numerous modes of receiving payment. The numerous modes of receiving payment are-1. Cash2. Travelers cheque3. Credit card4. Debit card5. Credit sale (companies)6. Travel agents, etc.

Q. 23. What are the different scopes of control? Scopes of control are-1. To check frauds and thefts.2. To safeguard the assets of the business from thefts and misuse (cutlery and small equipments)3. To improve the efficiency4. To follow the policies of the management5. To improve the quality6. To complete the records up till the moment.7. To ensure management action to evaluate the information produced and to act upon it.