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Chapter 11 Inventory procedures.

OBJECTIVES

At the completion of this chapter, the student should be able to:

1. Identify perpetual inventory.

2. Identify physical inventory.

3. Find the cost of food sold.

4. Find the monthly food cost percent.

5. Identify computer applications for inventory procedures.

6. Explain the purpose of taking both a perpetual and a physical inventory.

7. Calculate physical inventory.

8. Identify and explain the concept of food in production.

KEY WORDS

inventory

perpetual inventory

physical inventory

food in production

transfers

final inventory

purchases

beginning inventory

cost of food sold

monthly food cost percent

weekly or period inventory recapitulation

In the previous two chapters, the importance of determining food and labor costs was explained, along with how to determine food and labor cost percentages. The purpose of this chapter is to explain the importance of determining the amount of inventory in a food service operation and the role inventory plays in determining food cost percentages. Both the actual taking of inventory and the costing out of inventory can be tedious and time-consuming jobs. However, for a food service operation to obtain an accurate monthly and yearly food cost percentage, they must be done. Inventory is a well-known business term because it is an activity that takes place in many business operations at least once a year. In a food service operation, it can be a continuous activity. An inventory is a catalog or itemized list of stock and its estimated value. An inventory of food service equipment may be taken from time to time, but the most important inventory concerns food. There are two kinds of inventories pertaining to food that are of major importance: the perpetual inventory and the physical inventory.

PERPETUAL INVENTORY

A perpetual inventory is a continuous or endless inventory. It is a record that is taken in the storeroom to show the balance on hand for each storeroom item. (See Figure 11-1.) As a requisition from the production crew is received and the items are issued, the amounts are subtracted from the inventory balance. When new shipments of each item arrive and are placed on the shelves, they are added to the inventory balance.

If the food service operation does a large volume of business, a computer would probably be placed in the storeroom to handle these functions. If a computer is not available, the functions are done manually. At the end of each month, when the physical inventory of each item is taken, the physical inventory should match the perpetual inventory. If the two do not match, a problem exists. The problem may be poor bookkeeping, negligence in checking incoming orders, theft, or a similar situation. Keep in mind that, in a business operation, control is a key word. The more departments, functions, or activities that can be controlled by management, the more profits will show up on the P&L sheet (profit and loss sheet).

[FIGURE 11-1 OMITTED]

PHYSICAL INVENTORY

The physical inventory may be taken at the end of each month or as frequently as needed, in order to determine the accurate cost of food consumed during that period. When doing a physical inventory, an actual count is taken of all stock on hand. The physical inventory figures are most important when making out the profit and loss sheet.

The inventory sheet should be prepared in advance using a standard form. This form should contain the name of each item, the quantity, size or bulk, unit price, and total price of items on hand. Two people usually take the inventory, one calling out the items on hand and the other recording the items and quantities. (See Figure 11-2.) While this task can be done by one person, it would be time consuming. Two people ensure accuracy and make it more difficult to steal inventory. Of course, if they work together, it will be easy for them to steal. That is why it is beneficial for the food service operator to have different individuals take the physical inventory from time to time. The unit price for each item listed can be obtained from invoices and purchase records. When setting up an inventory sheet, most establishments classify the food and supply items into common groups such as:

* canned foods

* other groceries

* butter, eggs, and cheese

* coffee and tea

* fruits and vegetables

* meat, poultry, and fish

* supplies

[FIGURE 11-2 OMITTED]

When the total inventory value is found, this figure represents the cost of food still on hand or in storage. It is food that has not been sold during this inventory period. The inventory value is then used to find the monthly food cost percent. When computing the monthly food cost percent, this figure is referred to as the final inventory.

FOOD IN PRODUCTION AND OTHER TRANSFERS

In order to obtain an accurate food cost percentage, the amount of food that has been prepared, but not served, must be included. This figure also includes the food that is in the refrigerators or freezers on the cooking and dessert lines. The amount of food can equal a large amount of dollars, and, if not calculated in the food cost percentage, the percentage will not be accurate. The authors know of a chef who lowered his food cost by including the food in production. Before he did this, his food costs were just a bit too high. By including the food in production when calculating his monthly food cost, he achieved his desired food cost percentage.

Other transfers also affect food cost percentage. For example, if all of the fruits and vegetables that are used to garnish alcoholic beverages at the bar are not transferred to the bar costs, the food cost percentage will increase. In our examples in this textbook, the authors will not use any transfers. However, the student should be aware that if transfers are used in the operation where he or she is employed, the transfers should be included when calculating costs.

CALCULATING THE MONTHLY FOOD COST PERCENTAGE

To find the monthly food cost percent, the purchases for the month are added to the inventory at the beginning of the month, and the final inventory plus the amount of food in production is subtracted to give the cost of food sold for the month. The food cost percent is then found by dividing the total sales for the month into the cost of food sold. The division should be carried four places to the right of the decimal to give the percent. (See Figure 11-3.)
Purchases + beginning inventory - (food in production + final
inventory) = (equals)
Cost of food sold.

Cost of food sold - total sales
= (equals)
Food cost percent.


The amount of sales is the total food sold during that particular month. It is the total of all sales made during that period. The purchases for the month represent the total of all the food purchased during that month. This is found by adding the totals of all invoices sent with each food purchase. The inventory at the beginning of the month is the final inventory from the previous month. (For an example of a physical inventory recapitulation see Figure 11-4.)

SUMMARY REVIEW 11-1
Item No. 1 Canned goods

Calculate the extension prices for Items 1-7 on the following pages.

Canned Goods

Quantity/Size   Item                  Unit Price   Extension

 8-#10          Apples                     $3.52   $ --
 6-#10          Apricots                    5.29     --
 9-#10          Beans, Green                2.61     --
10-#10          Beans, Kidney               1.84     --
12-#10          Beans, Wax                  2.07     --
14-#10          Bean Sprouts                2.79     --
 4-#10          Beets, Whole                3.03     --
 3-#10          Carrots, Whole              3.44     --
 8-#10          Cherries                    7.31     --
 2-#10          Fruit Cocktail              4.10     --
 3-#10          Noodles (Chow Mein)         2.74     --
 6-#10          Peach Halves                3.71     --
 5-#10          Peaches, Pie                3.60     --
 5-#10          Pears                       3.51     --
 4-#10          Pineapple Tidbits           3.79     --
10-#10          Pineapple Slices            3.84     --
 4-#10          Plums                       3.24     --
 6-#10          Pumpkin                     3.85     --
 7-#10          Sweet Potatoes              3.26     --
 9-#10          Tomato Catsup               2.12     --
 8-#10          Tomato Puree                3.67     --
 3-#10          Tomatoes                    3.41     --
 6-#10          Asparagus Spears            6.50     --
 8-#10          Cream Style Corn            2.08     --
12-#10          Whole Kernel Corn           2.15     --
24-#2           Salmon                      2.30     --

                              Canned Goods Total   $ --

Item No. 2 Other groceries

Groceries--Dry Bulk Goods

Quantity/Size   Item                    Unit Price        Extension

 8 lb.          Baking Soda                  $0.22         $ --
 9 lb.          Baking Powder                 8.40           --
 8 lb.          Cocoa                         5.90           --
 6 lb.          Coconut Shred                 1.12           --
10 lb.          Cracker Meal                  0.18           --
 4 lb.          Chicken Base                  1.12           --
 7 lb.          Beef Base                     1.15           --
 6 lb.          Raisins                       1.19           --
 9 lb.          Cornmeal                      0.15           --
12 lb.          Cornstarch                    0.46           --
20 lb.          Tapioca Flour                 0.22           --
63 lb.          Bread Flour                   0.20           --
53 lb.          Cake Flour                    0.25           --
74 lb.          Pastry Flour                  0.22           --
15 lb.          Elbow Macaroni                0.49           --
18 lb.          Spaghetti                     0.52           --
 6 lb.          Rice                          0.45           --
12 lb.          Noodles                       1.13           --

                                         Subtotal          $ --

Item No. 2 Other groceries

Groceries--Oils and Fats

Quantity/Size   Item                         Unit Price   Extension

12 cases        Margarine                        $50.52    $ --
1 1/2 tin       Shortening, 50-lb. tin            26.00      --
2 cans          Salad Oil, 5-gal. can             22.10      --

                                         Subtotal          $ --

Item No. 2 Other groceries

Groceries--Spices

Quantity/Size   Item               Unit Price   Extension

1 1/2 lb.       Allspice, Ground     $7.02      $ --
1 3/4 lb.       Bay Leaves            4.20        --
2 lb.           Chili Powder          4.35        --
3 lb.           Cinnamon              6.20        --
4 lb.           Cloves, Ground        6.95        --
1 1/4 lb.       Ginger, Ground        4.50        --
1 1/2 lb.       Cumin Seed            3.82        --
2 1/2 lb.       Celery Seed           5.10        --
2 1/2 lb.       Caraway Seed          2.90        --
1 3/4 lb.       Mace                 12.50        --
2 3/4 lb.       Mustard, Dry          2.80        --
1 1/2 lb.       Marjoram, Dry         3.50        --
3 lb.           Nutmeg                8.50        --
4 lb.           Oregano               4.25        --
5 lb.           Pepper, White         6.00        --
3 lb.           Pepper, Black         5.00        --
2 lb.           Pickling Spice        4.18        --
1 1/2 lb.       Rosemary Leaves       8.12        --
1 1/4 lb.       Sage                 10.82        --
1 3/4 lb.       Thyme                 5.89        --
                                   Subtotal     $ --

Item No. 2 Other groceries

Groceries--Dressing and Condiments

Quantity/Size   Item                   Unit Price   Extension

3 gal.          Mayonnaise                $8.44     $ --
2 gal.          Dill Pickles               3.22       --
1 1/2 gal.      Sweet Relish               4.60       --
4 gal.          Salad Dressing             3.88       --
6 1/2 gal.      Vinegar                    1.20       --
1 1/4 gal.      Soy Sauce                  6.48       --
4 gal.          Worcestershire Sauce       3.73       --
5 gal.          French Dressing            4.54       --

                                        Subtotal    $ --

Item No. 2 Other groceries

Groceries--Coloring and Extracts

Quantity/Size     Item                Unit Price   Extension

1 1/2 qt.         Caramel Color            $5.95   $ --
1 1/4 pt.         Yellow                    3.12     --
1 3/4 pt.         Red                       2.82     --
2 pt.             Green                     3.16     --
1 pt.             Lemon Extract             6.99     --
3 pt.             Vanilla Extract          11.89     --
1 1/2 pt.         Maple Extract             4.09     --

                                        Subtotal   $ --

                           Other Groceries Total   $ --

Item No. 3 Butter, eggs, and cheese

Butter, Eggs, and Cheese

Quantity/Size     Item                Unit Price   Extension

 8 lb.            American Cheese          $1.70     --
15 lb.            Chip Butter              $1.12     --
14 doz.           Eggs                      0.86     --
                  Butter, Eggs, and Cheese Total

Item No. 4 Coffee and tea

Coffee and Tea

Quantity/Size     Item                Unit Price   Extension

16 lb.            Coffee                   $2.68   $ --
1/2 pkg.          Tea--indiv. (100)         2.50     --
1/4 pkg.          Tea--iced (48)            6.24     --
                  Coffee and Tea Total             $ --

Item No. 5 Fruits and vegetables--fresh

Fruits and Vegetables--Fresh

Quantity/Size   Item               Unit Price   Extension

 4 bu.          Carrots                 $0.89   $ --
 3 lb.          Endive                   1.45     --
 7 head         Head Lettuce             0.89     --
 8 lb.          Leaf Lettuce             1.25     --
20 lb.          Dry Onions               0.46     --
54 lb.          Red Potatoes             0.53     --
44 lb.          Idaho Potatoes           0.51     --
 6 lb.          Tomatoes                 0.88     --
 3 bu.          Parsley                  0.45     --
 5 lb.          Green Peppers            0.48     --
 8 lb.          Apples                   0.83     --
 7 lb.          Bananas                  0.35     --
 4 doz.         Lemons                   2.25     --
 5 doz.         Oranges                  2.25     --
 5 bu.          Radishes                 0.35     --
 3 bu.          Celery                   0.89     --

                                    Subtotal    $ --

Item No. 5 Fruits and vegetables--frozen

Fruits and Vegetables--Frozen

Quantity/Size   Item               Unit Price   Extension

 9 lb.          Strawberries            $1.06   $ --
12 lb.          Peaches                  1.17     --
16 lb.          Blueberries              1.52     --
34 lb.          Lima Beans               1.23     --
25 lb.          Corn                     0.63     --
18 lb.          Broccoli                 0.78     --
12 lb.          Brussels Sprouts         0.87     --
18 lb.          Mixed Vegetables         0.57     --
22 lb.          Peas                     0.56     --
16 lb.          Cauliflower              0.90     --

                                     Subtotal   $ --

                  Fruits and Vegetables Total   $ --

Item No. 6 Meat, poultry, and fish

Meat, Poultry, and Fish

Quantity/Size   Item              Unit Price   Extension

15 lb.          Beef Ground            $1.72   $ --
21 lb.          Beef Round              2.25     --
30 lb.          Beef Ribs               2.95     --
22 lb.          Beef Rib Eyes           3.20     --
19 lb.          Beef Chuck              1.95     --
15 lb.          Club Steak              3.58     --
14 lb.          Beef Tenderloin         6.20     --
28 lb.          Pork Loin               5.40     --
22 lb.          Boston Butt             2.20     --
36 lb.          Veal Leg                7.40     --
12 lb.          Veal Shoulder           6.22     --
14 lb.          Veal Loin               8.20     --
32 lb.          Ham                     2.35     --

                                    Subtotal   $ --

               Meat, Poultry, and Fish Total

Item No. 7 Supplies

Supplies

Quantity/Size   Item              Unit Price   Extension

4               Napkins               $41.00   $ --
8               Butter Chips            5.48     --
22              Souffle Cups            7.80     --
15              Paper Bags              7.95     --
12 gal.         Bleach                  1.24     --
13 gal.         Dish                    3.89     --
21 lb.          Salute                  0.58     --
5 ea.           Pot Brushes             2.89     --

                Supplies Total                 $ --


SUMMARY REVIEW 11-2

From Summary Review 11-1, fill in the totals for all the categories.
Example of a Physical Inventory
(Prices are not current)
Weekly or Period Inventory Recapitulation

Week Ending                          Period Ending
August 9, 20                         August 31, 20 --

Item No.   Item                      Amount

1.         Canned Goods              $ --
2.         Other Groceries             --
3.         Butter, Eggs, Cheese        --
4.         Coffee and Tea              --
5.         Fruits and Vegetables       --
6.         Meat, Poultry, and Fish     --
                        TOTAL FOOD   $ --

7.         Supplies                  $ --

           Total Inventory Value     $ --

Called By                            Extended by
                                     Manager


SUMMARY REVIEW 11-3

Find the monthly food cost percent and the cost of food sold using the following information. Calculate the food cost percentage two places to the right of the decimal.
Sales for the Month                        $54,000.00
Beginning Inventory                          6,780.50
Purchases for the Month                     15,890.00
Food in Production                           2,005.10
Final Inventory will be the answer from Summary Review 11-2
The cost of food sold is -- ?
The monthly food cost percentage is -- ?


Identifying Beginning and Final Inventory

To explain the beginning inventory further and to clarify a point that can be confusing, let us use the months of October and November as examples. The final inventory for the month of October becomes the beginning inventory for the month of November. The final inventory, as stated before, is found from the physical inventory taken at the end of each month. To carry this point further, the final inventory for the month of November becomes the beginning inventory for the month of December.

The monthly food cost percent tells the food service operator what percentage of the total sales for that period was used to purchase food for the operation. This is a very important figure and one that must be con- trolled because the cost of food and labor are the highest costs in any food service operation.

SUMMARY REVIEW 11-4

In problems 1 through 5, find the cost of food sold and the monthly food cost percent. Carry percents two places to the right of the decimal.
1. Food in Production                      $5,025.00
   Sales                                  $48,500.00
   Inventory at Beginning of Month          4,890.00
   Purchases for the Month                 41,465.00
   Final Inventory                          3,682.00
   Cost of Food Sold
   Monthly Food Cost Percent

2. Food in Production                      $2,017.25
   Sales                                  $76,585.54
   Inventory at Beginning of Month          8,296.25
   Purchases for the Month                 18,440.25
   Final Inventory                          4,635.65
   Cost of Food Sold                           --
   Monthly Food Cost Percent                   --

3. Food in Production                      $1,025.00
   Sales                                  $29,760.00
   Inventory at Beginning of Month          1,495.00
   Purchases for the Month                 12,025.00
   Final Inventory                            675.00
   Cost of Food Sold                           --
   Monthly Food Cost Percent                   --

4. Food in Production                        $895.00
   Sales                                 $125,545.00
   Inventory at Beginning of Month          6,264.36
   Purchases for the Month                 28,418.00
   Final Inventory                          3,268.45
   Cost of Food Sold                           --
   Monthly Food Cost Percent                   --

5. Food in Production                      $1,395.00
   Sales                                  $66,342.50
   Inventory at Beginning of Month          4,615.15
   Purchases for the Month                 22,728.00
   Final Inventory                          3,785.00
   Cost of Food Sold                           --
   Monthly Food Cost Percent                   --


Case Study In this exercise, your instructor calls out the quantity and unit price of each item listed. Quantity and unit price may be true and current or hypothetical. The instructor should also give the figures of sales, inventory at the beginning of month, purchases for the month, and food in production.

The student is asked to find the extension price, subtotals, totals, total food (on front of inventory), total inventory value (on front of inventory), and the monthly food cost percent.
Form to Use for Part B.
Weekly or Period
Inventory Recapitulation

Week Ending                        Period Ending

Item No.    Item                          Amount

1.          Canned Goods
2.          Other Groceries
3.          Butter, Eggs, Cheese
4.          Coffee and Tea
5.          Fruits and Vegetables
6.          Meat, Poultry, and Fish

                              TOTAL FOOD

7.          Supplies

            Total Inventory Value

Called By --                   Extended by --
                               Manager --

Groceries--Dry Bulk Goods

Quantity/                             Unit
Size        Item                      Price      Extension

lb.         Baking Soda
lb.         Baking Powder
lb.         Cocoa
lb.         Coconut Shred
lb.         Cracker Meal
lb.         Chicken Base
lb.         Beef Base
lb.         Raisins
lb.         Cornmeal
lb.         Cornstarch
lb.         Tapioca Flour
lb.         Bread Flour
lb.         Cake Flour
lb.         Pastry Flour
lb.         Elbow Macaroni
lb.         Spaghetti
lb.         Rice
lb.         Noodles

                                      Subtotal

Groceries--Oils and Fats

Quantity/                            Unit
Size        Item                    Price     Extension

lb.         Margarine
lb.         Shortening
lb.         Salad Oil

                                   Subtotal

Groceries--Dressing and Condiments

Quantity/                            Unit
Size        Item                    Price     Extension

gal.        Mayonnaise
gal.        Dill Pickles
gal.        Sweet Relish
gal.        Salad Dressing
gal.        Vinegar
gal.        Soy Sauce
gal.        Worcestershire Sauce
gal.        French Dressing

                                   Subtotal

Groceries--Coloring and Extracts

Quantity/                            Unit
Size        Item                    Price     Extension

qt.         Caramel Color
pt.         Yellow
pt.         Red
pt.         Green
pt.         Lemon Extract
pt.         Vanilla Extract
pt.         Maple Extract

                                   Subtotal

                      Other Groceries Total

Butter, Eggs, and Cheese

Quantity/                            Unit
Size        Item                    Price     Extension

lb.         American Cheese
lb.         Chip Butter
doz.        Eggs

            Butter, Eggs, and Cheese Total

Fruits and Vegetables--Frozen

Quantity/Size   Item               Unit Price   Extension

lb.             Strawberries
lb.             Peaches
lb.             Blueberries
lb.             Lima Beans
lb.             Corn
lb.             Broccoli
lb.             Brussels Sprouts
lb.             Mixed Vegetables
lb.             Peas
lb.             Cauliflower

                                     Subtotal

                  Fruits and Vegetables Total

Meat, Poultry, and Fish

Quantity/Size   Item               Unit Price   Extension

lb.             Beef Ground
lb.             Beef Round
lb.             Beef Ribs
lb.             Beef Rib Eyes
lb.             Beef Chuck
lb.             Club Steak
lb.             Beef Tenderloin
lb.             Pork Loin
lb.             Boston Butt
lb.             Veal Leg
lb.             Veal Shoulder
lb.             Veal Loin
lb.             Ham

                                     Subtotal

                Meat, Poultry, and Fish Total

Supplies

Quantity/Size   Item               Unit Price   Extension

                Napkins
                Butter Chips
                Souffle Cups
                Paper Bags
gal.            Bleach
gal.            Dish
lb.             Salute
ea.             Pot Brushes

                               Supplies Total

Sales                              --
Inventory at Beginning of Month    --
Purchases for the Month            --
Food in Production                 --
Final Inventory                    --
Cost of Food Sold                  --
Food Cost Percent                  --


COMPUTER APPLICATIONS

An important application of the computer involves the recording of the food service establishment's inventory. The calculations involved in completing an inventory sheet are very time consuming. The computer inventory sheet will eliminate most of the mathematical calculations, saving the establishment both time and money.

There are many types of software available to complete this task. Some chefs and managers use "canned programs," while others set up their own spreadsheets using programs like Microsoft Excel.

The format of the computer inventory sheet varies from the form used when taking inventory by hand. (See Figure 11-5.)

You will be responsible for entering the quantity. What is entered into the quantity column is determined by how much you have in stock, and by how the product is packaged. It is important that the quantity entered is in terms of the unit. For example, suppose you have 16 pounds of margarine in inventory, and the cost of the margarine is $16.64 for a 32- pound case. The amount you enter into the quantity column is 0.5, since the 16 pounds you have in inventory is one-half of the 32 pounds that is in one case.

Example: the following has been found in inventory:

* 8 lb. of margarine at $16.63 for a 32-16. case

* 2 lb. of shortening at $26.00 for a 50-1b. tin

* 3 lb. of salad oil at $22.00 for a 5-gal. can

Figure 11-6 shows how the computer inventory sheet would look.

SUMMARY REVIEW 11-5

Calculate the extension prices for Items 1-7 on the following pages using either a computer or calculator.
Item No. 1 Canned goods

Canned Goods

Quantity   Item                  Size   Unit Price   Extension

 6         Apples                #10       $ 3.52    $ --
 7         Apricots              #10          5.29     --
10         Beans, Green          #10          2.61     --
 7         Beans, Kidney         #10          1.84     --
12         Beans, Wax            #10          2.07     --
13         Bean Sprouts          #10          2.79     --
 5         Beets, Whole          #10          3.03     --
 6         Carrots, Whole        #10          3.44     --
 7         Cherries              #10          7.31     --
 2         Fruit Cocktail        #10          4.10     --
 1         Noodles (Chow Mein)   #10          2.74     --
 4         Peach Halves          #10          3.71     --
 6         Peaches, Pie          #10          3.60     --
 5         Pears                 #10          3.51     --
 3         Pineapple Tidbits     #10          3.79     --
 8         Pineapple Slices      #10          3.84     --
 3         Plums                 #10          3.24     --
 5         Pumpkin               #10          3.85     --
 7         Sweet Potatoes        #10          3.26     --
 8         Tomato Catsup         #10          2.12     --
 7         Tomato Puree          #10          3.67     --
 4         Tomatoes              #10          3.41     --
 6         Asparagus Spears      #2           6.50     --
10         Cream Style Corn      #22          2.08     --
 8         Whole Kernel Corn     #2           2.15     --
16         Salmon                #2           2.30     --

                                Canned Goods Total   $ --

Item No. 2 Other groceries

Groceries--Spices

Quantity   Item                   Size         Unit Price   Extension

1.25       Allspice, Ground       lb.              $ 7.02   $ --
2.5        Bay Leaves             lb.                7.20     --
1          Chili Powder           lb.                4.35     --
3          Cinnamon               lb.                6.20     --
2.5        Cloves, Ground         lb.                6.95     --
1.75       Ginger, Ground         lb.                4.50     --
2.25       Cumin Seed             lb.                3.82     --
1.5        Celery Seed            lb.                5.10     --
3.25       Caraway Seed           lb.                2.90     --
0.25       Mace                   lb.               12.50     --
1.25       Mustard, Dry           lb.                2.80     --
2.75       Marjoram, Dry          lb.                3.50     --
2          Nutmeg                 lb.                8.50     --
3.5        Oregano                lb.                4.25     --
2          Pepper, White          lb.                6.00     --
4          Pepper, Black          lb.                5.00     --
3          Pickling Spice         lb.                4.18     --
2          Rosemary Leaves        lb.                8.12     --
1.74       Sage                   lb.               10.82     --
2.25       Thyme                  lb.                5.89     --

                                                 Subtotal   $ --

Item No. 2 Other groceries

Groceries--Dressing and Condiments

Quantity   Item                   Size         Unit Price   Extension

4          Mayonnaise             gal.             $ 8.44   $ --
2          Dill Pickles           gal.               3.22     --
3          Sweet Relish           gal.               4.60     --
3.5        Salad Dressing         gal.               3.88     --
7          Vinegar                gal.               1.20     --
2.75       Soy Sauce              gal.               6.48     --
5          Worcestershire Sauce   gal.               3.73     --
6.25       French Dressing        gal.               4.54     --

                                                 Subtotal   $

Item No. 2 Other groceries

Groceries--Oils and Fats

Quantity   Item                   Size         Unit Price   Extension

0.43       Margarine              3-lb. case        $7.28   $ --
1.5        Shortening             50-lb. tin        20.80     --
0.8        Salad Oil              5-gal. can         6.60     --

                                               Subtotal     $ --

Item No. 2 Other groceries

Groceries--Dry Bulk Goods

Quantity   Item              Size          Unit Price   Extension

 7         Baking Soda       lb.                $0.22   $ --
 1.6       Baking Powder     5-lb. box           8.40     --
 1.6       Cocoa             5-lb. box           5.90     --
 5         Coconut Shred     lb.                 1.12     --
 9         Cracker Meal      lb.                 0.18     --
 3         Chicken Base      lb.                 1.12     --
 8         Beef Base         lb.                 1.15     --
 5         Raisins           lb.                 1.19     --
 8         Cornmeal          lb.                 0.15     --
13         Cornstarch        lb.                 0.46     --
18         Tapioca Flour     lb.                 0.22     --
 0.58      Bread Flour       100-lb. bag        20.00     --
 0.61      Cake Flour        100-lb. bag        25.00     --
 0.75      Pastry Flour      100-lb. bag        22.00     --
13         Elbow Macaroni    lb.                 0.49     --
16         Spaghetti         lb.                 0.52     --
 7         Rice              lb.                 0.45     --
10         Noodles           lb.                 1.13     --

                                            Subtotal    $ --

Item No. 2 Other groceries

Groceries--Coloring and Extracts

Quantity   Item              Size          Unit Price   Extension

2          Caramel Color     qt.                $5.95   $ --
1.5        Yellow            pt.                 3.12     --
2.25       Red               pt.                 2.82     --
3          Green             pt.                 3.16     --
2          Lemon Extract     pt.                 6.99     --
2          Vanilla Extract   pt.                11.89     --
2.5        Maple Extract     pt.                 4.09     --

                                             Subtotal   $ --

                             Other Groceries Total      $ --

Item No. 3 Butter, eggs, and cheese

Butter, Eggs, and Cheese

Quantity   Item              Size          Unit Price   Extension

 6         American Cheese   lb.                $1.70   $ --
12         Chip Butter       lb.                 1.12     --
18         Eggs              doz.                0.86     --

                       Butter, Eggs, and Cheese Total   $ --

Item No. 4 Coffee and tea

Coffee and Tea

Quantity   Item                Size   Unit Price   Extension

18         Coffee              lb.       $ 2.68    $ --
1/4        Tea--indiv. (100)   pkg.        2.50      --
1/2        Tea--iced (48)      pkg.        6.24      --

                           Coffee and Tea Total    $ --

Item No. 5 Fruits and vegetables--fresh

Fruits and Vegetables--Fresh

Quantity   Item                Size   Unit Price   Extension

3          Carrots             bu.        $ 0.89   $ --
2          Endive              lb.          1.45     --
8          Head Lettuce        head         0.89     --
9          Leaf Lettuce        lb.          1.25     --
18         Dry Onions          lb.          0.46     --
50         Red Potatoes        lb.          0.53     --
46         Idaho Potatoes      lb.          0.51     --
4          Tomatoes            lb.          0.88     --
2          Parsley             bu.          0.45     --
6          Green Peppers       lb.          0.48     --
9          Apples              lb.          0.83     --
8          Bananas             lb.          0.35     --
6          Lemons              doz.         2.25     --
4          Oranges             doz.         2.25     --
6          Radishes            bu.          0.35     --
4          Celery              bu.          0.89     --

                                        Subtotal   $ --

Item No. 5 Fruits and vegetables--frozen

Fruits and Vegetables--Frozen

Quantity   Item                Size   Unit Price   Extension

8          Strawberries        lb.         $1.06   $ --
10         Peaches             lb.          1.17     --
18         Blueberries         lb.          1.52     --
27         Lima Beans          lb.          1.23     --
30         Corn                lb.          0.63     --
17         Broccoli            lb.          0.78     --
11         Brussels Sprouts    lb.          0.87     --
19         Mixed Vegetables    lb.          0.57     --
23         Peas                lb.          0.56     --
18         Cauliflower         lb.          0.90     --

                                        Subtotal   $ --

                     Fruits and Vegetables Total   $ --

Item No. 6 Meat, poultry, and fish

Meat, Poultry, and Fish

Quantity   Item              Size   Unit Price   Extension

16         Beef Ground       lb.         $1.72   $ --
20         Beef Round        lb.          2.25     --
25         Beef Ribs         lb.          2.95     --
23         Beef Rib Eyes     lb.          3.20     --
20         Beef Chuck        lb.          1.95     --
16         Club Steak        lb.          3.58     --
15         Beef Tenderloin   lb.          6.20     --
27         Pork Loin         lb.          5.40     --
19         Boston Butt       lb.          2.20     --
33         Veal Leg          lb.          7.40     --
10         Veal Shoulder     lb.          6.22     --
13         Veal Loin         lb.          8.20     --
30         Ham               lb.          2.35     --

                 Meat, Poultry, and Fish Total   $ --

Item No. 7 Supplies

Supplies

Quantity   Item              Size   Unit Price   Extension

 6         Napkins                     $ 41.00   $ --
 9         Butter Chips                   5.48     --
20         Souffle Cups                   7.80     --
17         Paper Bags                     7.95     --
 6         Bleach            gal.         1.24     --
 9         Dish              gal.         3.89     --
20         Salute            lb.          0.58     --
 6         Pot Brushes       ea.          2.89     --

                                Supplies Total   $ --


SUMMARY REVIEW 11-6

From Summary Review 11-5, fill in the totals for all the categories.
Weekly or Period
Inventory Recapitulation

Week Ending                   Period Ending
September 12, 20 --           September 30, 20 --

Item No.   Item                      Amount

1.         Canned Goods              $ --
2.         Other Groceries             --
3.         Butter, Eggs, Cheese        --
4.         Coffee and Tea              --
5.         Fruits and Vegetables       --
6.         Meat, Poultry, and Fish     --

           TOTAL FOOD                $ --

7.         Supplies                  $ --

           Total Inventory Value     $ --

Called By --        Extended by --
                        Manager --


SUMMARY REVIEW 11-7

Calculate the monthly food cost using the final inventory from Summary Review 11-6. The amount of food in production is $15,020.
Total Sales                                         $53,265.00
Inventory at the Beginning of the Month               6,525.35
Purchases for the Month                              16,001.19
Final Inventory                                          --
Cost of Food Sold                                        --
Food Cost Percent                                        --


DISCUSSION QUESTIONS

Based upon your answer in Summary Review 11-7, does this establishment have problems with their monthly food cost? What will happen to the food cost if no one counts the amount of food in production?
Chef Sez ...

"We have three and a half hours to feed
a small city; potentially 78,000 guests.
When a popular team or a popular player
is scheduled, we have a capacity crowd.
The next day we may only have 11,000
fans. A chef or food service manager
needs to use math to figure out how
much food to order and how much to
cook in order to have enough food for
our guests, but not too much where we
have waste."

Matthew J. Kaperka
General Manager, The Mark of the Quad Cities
Sports & Entertainment, ARAMARK Corporation


Matt Kaperka is the general manager for food and beverage at The Mark of the Quad Cities on the banks of the Mississippi. The quad cities are Davenport and Bettendorf in Iowa and Moline/East Moline and Rock Island in Illinois. He has used knowledge gained from both Shea Stadium and the Houston Astrodome to manage the food for the 12,000 seat arena in the Quad Cities that holds events such as rock shows, hockey, and arena 2 football. Formerly Matt was the concessions manager at Shea Stadium in New York, home of the New York Mets professional baseball team. He has had a wealth of experience in sports and entertainment food service. Previously, he worked in Houston, Texas, at the Astrodome. The tenants at the Astrodome included the Houston Astros baseball team and the Houston Oilers football team. In addition, there were many special events such as the rodeo, for which ARAMARK and Mr. Kaperka had to provide the concessions. He must use his math skills daily to accomplish his goals.
Figure 11-3 How to find cost of food sold and monthly food cost
percent

Sales for the Month                                           $2,550.00
Inventory at the Beginning of the Month                         $300.00
Purchases for the Month                                         $895.00
Food in Production                                              $150.00
Final Inventory                                                 $250.00

Step 1                                                          Step 1

To find the Cost of Food Sold, first add:                       $300.00
Inventory at the Beginning of the Month                        + 895.00
To Purchases for the Month                                    $1,195.00
Sum for the Beginning Inventory and Purchases for
  the Month

Step 2                                                          Step 2

Add the Food in Production                                     $ 150.00
To the Final Inventory                                            + 250
Sum for the Food in Production and the Final
  Inventory                                                     $400.00

Step 3                                                          Step 3

Take the Sum of the Beginning Inventory and Purchases
  for the Month                                               $1,195.00
And subtract the Sum for the Food in Production and
  the Final Inventory                                          - 400.00

Cost of Food Sold is                                            $795.00

Step 4                                                           Step 4

To find the Monthly Food Cost Percent
Divide the Sales for the Month                                $2,550.00
into the Cost of Food Sold                                      $795.00
Monthly Food Cost Percent                                        .31176
                                                        2550) 795000000
                                                             -7650
                                                               3000
                                                              -2550
                                                                4500
                                                               -2550
                                                                  19500
                                                                 -17850
                                                                  16500
Monthly Food Cost Percent is                                     31.18%

Figure 11-4 Example of a physical inventory

Example of a Physical Inventory
(Prices are not current)
Weekly or Period Inventory Recapitulation

Week Ending                        Period Ending
August 9, 20 --                   August 31, 20 --

Item No.    Item                          Amount

1.          Canned Goods                 $628.59
2.          Other Groceries               779.48
3.          Butter, Eggs, Cheese           42.44
4.          Coffee and Tea                 45.69
5.          Fruits and Vegetables         294.12
6.          Meat, Poultry, and Fish      1140.14
            TOTAL FOOD                 $2,930.46

7.          Supplies                    $ 590.77

            Total Inventory Value      $3,521.23

Called By --                Extended by --
                                Manager --

Figure 11-5 Computer inventory sheet

Groceries--Oils and Fats

Quantity   Item         Size          Unit Price   Extension

           Margarine    32-lb. case       $16.64
           Shortening   50-lb. tin         26.00
           Salad Oil    5-gal. can         22.00

                                        Subtotal

Figure 11-6 Computer inventory sheet, completed

Groceries--Oils and Fats

Quantity   Item         Size          Unit Price   Extension

0.25       Margarine    32-lb. case       $16.64       $4.16
0.4        Shortening   50-lb. tin         26.00       10.40
0.075      Salad Oil    5-gal. can         22.20        1.67

                                        Subtotal      $16.23
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Title Annotation:PART IV Math Essentials in Food Service Record Keeping
Publication:Math Principles for Food Service Occupations
Geographic Code:1USA
Date:Jan 1, 2007
Words:5241
Previous Article:Chapter 10 Determining cost percentages and pricing the menu.
Next Article:Chapter 12 Purchasing and receiving.
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