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FactorsAffectingCostControl
1.FoodCostsFoodisthemostreadilycontrolleditemofexpenditure
andthefactormostsubjecttofluctuationinthefoodservicebudget.If
control of food costs is to be effective, efficient methods must be
employed in planning the menu, purchasing, storing, preparing and
servingfood.Theexpenditureforfoodvariesgreatlyfromonetypeof
institution to another and often for institutions of the same type
because of the form of food purchased geographic location and
deliverycosts.
Foodcostisusuallyexpressedintermsofpercentoftheincomespent
forfoodandmayrangefrom18to20%to70or80%oftheincome.
Thesewidevariationsareduetomanycausesanditisdifficulttogive
percentagefiguresthataretypicalforanytypeoforganization.
Inluxuryrestaurantswithelaborateserviceandhighoverheadcosts,
onlyabout1820%oftheguestsfoodmoneymaybespentforfood.
In college cooperative residences for students, where much of the
labor is provided by the residents and some of the overhead is often
paidbytheschool,thefoodcostmaybeashighas7080%ofincome.
Inspiteofthevariationintheamountsspentforfood,theunderlying
bases for food cost control are the same for all types of food
serviceunits.
2.Typeofservice:Offeredmaybeafactorindeterminingfood
costs. For example food service using table service will have a
higher food and labor cost than a cafeteria style service. Self
service helps in savings because each individual can decide the
quantityhepreferandthusreducewastage.
3.Purchasing methods: Food costs begin at the time of
purchaseandcontrolledproceduresareaneffectivestepforwise
buying.
Bulkpurchasingrigidsetofspecificationforqualityoffoodto
bepurchased.
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2.Labour Costs Sometimes labor costs may be higher than the food
cost percentage. They are less controllable than food costs. Labor is
notafixedexpense,becauseitisinfluencedbymanyconditionssuch
as
1.Typeofoperationandextentofservicesoffered,
2.Hoursofservice,
3.Themenupatternandtheforminwhichthefoodispurchased
4.Thephysicalplant,thesizeandarrangementofthepreparation
and serving units and their relation to each other, the amount,
kind and arrangement of labor saving equipment, employee
selectionpolicyetc.supervisionwagescale&fringebenefits.
1.Type of service: cafeterias require less number of labour. In
Table service the labour requirement is based on the ratio of
waiterstoguestswillvary
2.Hours of work / service: will determine number of shifts
number of meals to be served. In school lunch only one meal
whereashospitalfoodserviceshouldprovide4to5meals/day.
3.Menu pattern: Major controlling factor in determining
numberofemployeesrequiredandskill(varieswithtypeoffood
serviceorg.amt.ofbuiltinlabourwhichismoreprofitable.
4.Physical plant: Efficient kitchen arrangement helps in
controlling labour cost. Poor planning, arrangement results in
inconvenience and waste of human energy additional labour
may be required to left, handle & carry or move materials in a
poorlyarrangedkitchen.
5.Equipment & arrangement: labour saving equipment is
related to no. of labour hours required to accomplish a given
priceofwork.
6.Personnel policies: proper selection and skill increases the
productivitywhichhelpsinlabourcostcontrol.Training
7.Supervision: helps to achieve better standards greater
utilization of labour & equipment, and more compact
functioninglayouts.
8.FringeBenefits:aregiventotheemployeesasencouragement
to increase the productivity apart from the regular salary. This
alsoincludesgoodshareoflabourcosts.Thiscanbeminimized
bybetterschedulingorredistributionofworkloads.
keptdaily,areaccurateandareusedbymanagement.
1.ProcurementandReceivingRecords:
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1.Cashreceiptsrecord
6.Operating&maintenance:
1.Laundryrecords:Numberofitemssentforlaundering
2.Other controllable costs: Record of operating costs.
Repairs,maintenanceetc.
7.Personnelcostcontrolrecords:
1.Timecardpayrollrecord:Tomaintainanaccuratereport
ofthehoursofworkspent.Helpstopreparepayrolls.
Budget: has been defined as an estimate of future needs, arranged
according to an orderly basis, covering some or all of the activities of an
enterpriseforadefiniteperiodoftime.
Financial planning for the future. Budgeting should also include the
numberofmealstobeservedandlabourhoursrequired.
Stepsinplanningbudget
1.Recordeverysourceofincome
2.Classifytheitemsofexpenses
3.Studytheoperationsofthedepartmentbasedonpreviousrecords.
4.Setprioritiesandmakedecisions
5.Writethebudgetforpresentation.
6.Usethebudget.
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