Showing posts from July, 2012

variance analysis

definition Variance means difference while analysis means breakdown. In Cost or Management Accounting, variance would relate to difference between Standard and Actual Costs. Analysis would break this difference into various parts like quantity, price and capacity. Any wide variation would be thoroughly investigated and persons responsible (purchase manager, human resource manager, factory manager or marketing manager) would be asked to explain. If it proved avoidable or controllable, someone would be penalized or reprimanded else measures would be taken to avoid in future as far as possible.
In short, variance analysis helps the management in decision-making. In addition (i) it is used in cost-control,
(ii) gives early warning for corrective action and
(iii) is useful in accountability.

What is a standard cost? It is a planned cost or a target cost. It is a realistic estimate based on historical data or experiments like time and motion studies. Standard costs give an indication of pr…

menu engineering

introduction Cost-control procedures were established to keep excess cost from developing and to help keep cost and cost per-centages within predetermined bounds. However, keeping food cost percentages to a given figure (e.g.. 35 percent), while critically important, does not mean that the most profit is obtained. In the final analysis, we take dollars to the bank, not percentages. Afer all, the contribution margin of menu items determines how much profit there will be, while considering the number of customers attracted to the foodservice facility. As an example, two items found on the menu at the Grandview Bistro are Strip Steak and Chicken Albufera. Strip Steak has a standard cost of $7.50 and a selling price of $23.65. Chicken Albufera has a standard cost of $5.20 and a sell¬ing price of $16.45. It is apparent that the contribution margin of the Strip Steak is considerably higher. At this point, it will help the student to reflect on the definition for contribution margin  give…

inventory-a key to control

 The perpetual inventory system is intended as an aid to material control. It is a system of stock control followed by stores department. The system follows a method of recording stores by which information about each receipt, issue and current balance of stock is always available.
The Institute of Cost and Management Accountants of England and Wales, defines perpetual inventory as "A system of records maintained by the controlling department, which reflects the physical movement of stocks and their current balances."
According to Weldon, "Perpetual inventory system is a method of recordings stores balances after every receipt and issue, to facilitate regular checking and obviate closing down of work for stock-taking."
Thus, it is a system of ascertaining current balance after recording every receipt and issue of materials through stock records. An important point which should be kept in mind is that the perpetual inventory is usually checked by a progr…

sales concept in bar

definition the term sales is defined as revenue resulting from the exchange of products and services for value. In our industry, food and beverage sales are exchanges of the products and services of a restaurant, bar, or related enterprise, for value. We normally express sales in monetary terms, although there are other possibilities.
Actually, there are two basic groups of terms normally used in food and beverage operations to express sales concepts: monetary and nonmonetary.

Total Sales Total sales is a term that refers to the total volume of sales expressed in dollar terms. This may be for any given time period, such as a week, a month, or a year. For example, total dollar sales for the Rush Hour Inn was expressed as $1,804,000 for the year ending December 31, 200X.

Total Sales by Category  Examples of total dollar sales by category
are total food sales or total beverage sales, referring to the total dollar volume of sales for all items in one category. By extension, we may see s…

cash control procedure

To control the revenue of a unit, particular attention must be paid to the major factors which can have an influence on the profitability. Therefore it is essential to control the main factors which can affect the revenue of a business, such as the menu-beverage list, the total volume of food and beverage sales, the sales mix, the average spend of customers in each selling outlet at different times of the day, the number of covers served and the gross profit margins.
it is important to note, particularly in commercial operations that somewhere in the total control system there is a need for the account ability of what has been served to the customer and the payment for what has been issued from the kitchen or the bar.
The payment for food and beverage may be made in many forms such as cash, foreign currency, credit cards, cheques, travellers' cheques, luncheon type vouchers and signed bills.
All staff handling cash should be adequately trained in the respective company's meth…