Essential Food Cost Control - All You Can Eat Operations

Dear Sir,

I have recently joined as trainee accountant and been assigned to conduct an audit of a catering project. However, I am clueless on how to arrive at a food cost. Below are the three targets I was provided and while I was looking over internet I found your blogs to be helpful. Can you please provide me any formula or a table that can be of help?

Check cost per man day and whether it has been under control as foreseen in the costing.

Check the menu and cost whether it complies according to the contractual stipulations.

Fix budget for cost centers and follow up in the subsequent months whether the expenditures are under control or not.

Thanks in advance sir.

Regards,
R

The key to success for your operation is in a complete understanding of the cycle menu. Certain weeks will run higher food costs. You will find certain days of the week run high and other days much lower. Once you get a feel for your menu and the patron preferences, your cost data will help you track the actual results vs. the plan.

Cost center analysis is best accomplished through head counts by meal period. Track the number of patrons for each meal period and for each dining area.

A cost per man day is a composite number which depends on the total cost of all food consumed. Slicing and dicing the total cost requires tracking patron attendance and food production. You'll get on top of the formula quickly by tracking details of the patron attendance and the traditional food cost formula:

FOOD COST = BEGINNING INVENTORY + PURCHASES - ENDING INVENTORY

Count data should be gathered by day in the cycle, meal period, dining room and any special event details. Really, there is no specific pattern to follow. Your contract will have details which will guide your selection.