Food & Beverage Cost Controls

Curriculum guideline

Effective Date:
Return to Course
Print Guideline
Course
HOSP 2330
Discontinued
No
Course code
HOSP 2330
Descriptive
Food & Beverage Cost Controls
Department
Hospitality Management
Faculty
Commerce & Business Administration
Credits
3.00
Start date
End term
201720
PLAR
No
Semester length
15 Weeks X 4 Hours Per Week = 60 Hours
Max class size
35
Contact hours
Lecture: 3 Hours Seminar: 1 Hour Total: 4 Hours
Method(s) of instruction
Lecture
Seminar
Learning activities

This course uses lectures, computer lab sessions and case studies.  Students are encouraged to participate in group discussions of case studies and control experiences.

Course description
This course focuses on the principles and procedures involved in an effective system of food, beverage and labour controls for the hospitality industry. This course provides the fundamentals for gathering information,
developing forms and procedures, assessing and evaluating the information and applying the results to maintain efficient food, beverage and labour cost control. Topics include: the basic control procedures used, food and beverage costing, labour cost analysis, pricing methods and computer applications. A restaurant management simulation program exercise is incorporated to enhance the cost control theory.
Course content
  1. The importance of effective cost control in the food and beverage industry
  2. The development and use of standards including average check, forecast sales, food and beverage cost percentages, labour productivity, and other cost percentages as a means to identify cost control problems
  3. The role of the operating budget in planning and cost management
  4. Calculating actual food cost and food cost percentage
  5. Developing standard food cost and food cost % given standardized recipes and sales history
  6. Control considerations in the areas of food purchasing, receiving, storage, issuing production and service
  7. Calculating actual and standard beverage cost and beverage cost percentages
  8. Unique control considerations in the areas of beverage purchasing, storage, issuing, production and service
  9. The mechanism and principle behind basic inventory control for a beverage operation
  10. Revenue control systems including prechecking, guest check controls and cashiering controls in food and beverage operations
  11. Labour cost control practices in food and beverage
  12. Scheduling and human resource management issues in food and beverage operations and how these impact labour cost
  13. Calculating, interpreting and using productivity ratios for labour cost control
  14. Developing and using usage ratios for control of other operating expenses
  15. Scientific and qualitative menu pricing considerations
  16. Analysis of a menu for profitability and popularity
  17. Functions and control applications of a POS
  18. Using spreadsheets to develop flexible budgets
  19. Using breakeven analysis in decision making and planning
  20. Employee and customer theft; how and why it happens; how it can be detected
  21. Analysis of income statements, average check, cost and net income per guest figures. 
  22. The role of computers to assist with purchasing functions, controlling inventory, analyzing business and determining personnel requirements, controlling labour costs, generating daily reports of costs and sales for management, and budgeting and preparing financial statements. 
  23. Control systems commonly used within the rooms department of a hotel to control sales, energy costs, labour costs and rooms supplies expense
Learning outcomes

The student will be able to:

  1. Calculate actual and standard food cost and beverage cost for an operation manually and using a spreadsheet
  2. Distinguish between standard, actual and budget food cost and food cost %
  3. Develop and use an inventory control system for beverage control
  4. Use revenue, covers and average cheque historicals to forecast sales
  5. Discuss the importance of cost controls in the successful operation of a food and beverage business
  6. Create and use a budget for identifying control issues
  7. Use a spreadsheet to develop a flexible budget
  8. Use breakeven analysis for planning and decision making
  9. Understand and identify control procedures, forms and systems used in the purchasing, receiving, storage, issuing, production and service of both food and beverage
  10. Create and use labour productivity standards
  11. Discuss the role of effective human resource management in reducing labour cost
  12. Create and use a staffing guide and align to budget
  13. Discuss the control of other direct operating costs
  14. Analyze a menu’s pricing structure with respect to profitability and popularity
  15. Set menu prices both scientifically and with qualitative considerations
  16. Discuss the concept of sales mix and the role it plays in food and beverage cost
  17. Discuss the applications for computers and Point of Sales systems in food and beverage control
  18. Interpret POS generated management reports
  19. Discuss the importance of sales (revenue control) and systems which can be put in place to minimize losses
  20. Discuss the increasing role of technology on control
  21. Discuss the importance of planning, supervision and staff training in controlling costs
  22. Identify employee, and customer theft risks and current preventative measures commonly used in the industry
  23. Discuss major control issues in the rooms department of a hotel
  24. Make decisions which maximize profitability through control of costs.
Means of assessment

Assignments                         20-30%

Term Project                         20-30%

Mid-term examinations          20-30%

Final Examination                  20-30%

                                              100%

STUDENTS MUST COMPLETE ALL COMPONENTS OF THE COURSE TO OBTAIN CREDIT FOR THE COURSE.

Textbook materials

Coltman, Michael M. Food and Beverage Cost Controls, latest ed. Toronto: Macmillan of Canada
or similar text as approved by the department.
 
Only calculators approved by faculty of Commerce and Business Administration may be used on tests and exams.

Prerequisites

HOSP 1145 and HOSP 1235 and  (HOSP 1210 or  ACCT 1110)

Which prerequisite

HOSP 2455 (may be taken as a corequisite) and HOSP 2465 (may be taken as a corequisite)