Chapter 5

Monitoring Food and Beverage Product Costs

Multiple Choice Exam Questions

1. A foodservice operation’s combined food and beverage costs are often referred to as the cost of
2. sales.
3. purchases.
4. goods consumed.
5. goods available for sale.
6. Food service operations typically report their cost of sales both by the total amount spent and the
7. number of guests served.
8. total number of menu items sold.
9. amount spent as a percentage of sales.
10. total value of all items held in inventory.
11. What is the formula used to calculate a food cost percentage?
12. Cost of Food Sold x Food Sales = Food Cost %
13. Cost of Food Sold ÷ Food Sales = Food Cost %
14. Food Sales - Cost of Food Sold = Food Cost %
15. Food Sales ÷ Cost of Food Sold = Food Cost %
16. What is subtracted from cost of goods sold when managers calculate their food cost percentages?
17. Prime costs
18. Variable labor expense
19. Costs of “comp” meals
20. Employee meal costs
21. What is its cost of food sold if an operation’s Beginning Inventory equals $5,000, Ending Inventory equals $2,000, Purchases equal $1,500 and Employee Meals equal $500?
22. $1,000
23. $2,500
24. $4,000
25. $4,500
26. Ending Inventory as calculated at the closing of an accounting period is also used as the
27. Beginning Inventory for the next accounting period.
28. Beginning Inventory for the previous accounting period.
29. Cost of Goods Consumed for the next accounting period.
30. Cost of Goods Consumed for the previous accounting period.
31. In what cost category should foodservice managers record the value of employee meals?
32. Food
33. Labor
34. Direct Operating Expense
35. General and Administrative
36. In the last accounting period, a food service director served 12,000 student meals, had a cost of food consumed of $36,500, and incurred $1,000 of employee meal costs. What was this director’s cost per meal served in the accounting period?
37. $2.88
38. $2.96
39. $3.04
40. $3.13
41. A food service operation on a military base served 3,200 meals in an accounting period and incurred a total cost of food sold in the period of $11,040. What was the operation’s cost per meal for the period?
42. $2.90
43. $3.15
44. $3.45
45. $4.90
46. An operation’s Beginning Inventory for an accounting period equaled $15,000. Ending Inventory for the period equaled $14,000, Purchases equaled $21,500 and Total Cost of Sales was $21,000. What was the amount of this operation’s Employee Meals in the period?
47. $1,000
48. $1,500
49. $2,000
50. $2,500
51. What would be the effect on his cost of food formula if a manager accidentally overstated the value of his operation’s ending inventory?
52. Total Cost of Sales would be overstated
53. Total Cost of Sales would be understated
54. Total Cost of Food Available for Sale would be overstated
55. Total Cost of Food Available for Sale would be understated
56. An operation incurred $8,000 in cost of beverage sold during an accounting period. The beverage cost percentage for the period was 20%. What were the operation’s beverage sales for the period?
57. $25,000
58. $30,000
59. $35,000
60. $40,000
61. A bar operation achieved $92,000 in beverage sales for an accounting period. For that period, it had a beginning inventory of $25,000. Ending inventory was $22,000 and beverage purchases equaled $20,000. What was the bar’s beverage cost percentage for the period?
62. 15%
63. 20%
64. 25%
65. 30%
66. Prior to accounting for product transfers, a manager calculates her food cost as 32.3% and her beverage cost as 22.5%. Total transfers from her kitchen to the bar equal $1,000 and total transfers from the bar to the kitchen equal $500. After these transfers have been made
67. both the food and beverage cost % will increase.
68. the food cost % will decrease and the beverage cost % will increase.
69. the food cost % will increase and the beverage cost % will decrease.
70. both the food and beverage cost % will decrease.
71. A bar operation had total beverage cost of $40,000 for an accounting period. For that period, its beer cost was $5,000, wine cost was $15,000, and spirit cost was $20,000. What proportion of this operation’s total beverage cost was its beer cost?
72. 12.5%
73. 14.5%
74. 16.5%
75. 18.5%
76. An operation’s six-column food cost estimate will be most accurate when the operation’s beginning inventory is
77. equal to its daily purchases.
78. less than its daily purchases.
79. equal to its ending inventory.
80. less than its ending inventory.
81. A manager buys fresh carrots in 20-pound cartons. After the carrots have been cleaned, trimmed, and chopped each carton yields 17 pounds of carrots (EP). What is the waste percentage for fresh carrots?
82. 13%
83. 15%
84. 17%
85. 19%
86. A chef buys 50 pounds of fresh casaba melon for making fruit salad. The waste percentage on the melons is 45%. After processing the 50 pounds of melon, how much fresh casaba will the chef have available for making the fruit salad?
87. 22.5 pounds
88. 23.5 pounds
89. 25.5 pounds
90. 27.5 pounds
91. A manager purchases fresh fish for $9.60 a pound. After cleaning and filleting the product the waste percentage for the fish is 34%. What is the EP cost per pound for this fish item?
92. $15.00
93. $17.50
94. $20.00
95. $22.50
96. A manager calculated that her attainable product cost for an accounting period was $29,000. Her actual product cost for the period was $29,580. What was the manager's operational efficiency ratio for this period?
97. 92%
98. 94%
99. 102%
100. 104%
101. Which area should be of greatest concern to beverage managers when hosts or sponsors are charged per-person prices for open bars?
102. Bartenders over portioning
103. Bartenders under portioning
104. The monitoring of full bottle counts
105. The monitoring empty bottle counts
106. Beverage managers can use a hydrometer to help prevent product
107. waste.
108. dilution.
109. spoilage.
110. evaporation.
111. Mystery shoppers in the food service industry must
112. announce their arrival.
113. be experienced servers.
114. be experienced managers.
115. do their work anonymously.
116. A standardized recipe for chili cost $56.00 to produce. The recipe yields 100 portions. Each portion is 8-ounces. What would be the cost per portion if the chef reduces the portion size of this item from 8-ounces to 7-ounces?
117. $0.49
118. $0.51
119. $0.53
120. $0.55
121. Who is most directly responsible for the sales mix achieved in a food service operation?
122. Servers
123. Customers
124. Managers
125. Owners

True/False Exam Questions

1. When utilizing the USAR, managers should report their cost of sales in terms of its total amount and its percentage of sales.
   1. True
   2. False
2. The formula used to calculate a Food Cost % is: Food Sales ÷ Cost of Food Sold.
   1. True
   2. False
3. Cost of food sold is the actual amount of all food expenses incurred by an operation minus its cost of employee meals.
   1. True
   2. False
4. If an operation achieved $20,000 in sales in an accounting period and had a cost of food sold of $5,000 in the same period, the operation’s food cost percentage for the period is 40%.
   1. True
   2. False
5. Because the cost of food items used in the production of alcoholic beverages is minimal, it is not usually worth the time to document the value of product transfers from the kitchen to the bar area.
   1. True
   2. False
6. A six-column form can be used to estimate an operation’s food cost percentage on a daily or weekly basis.
   1. True
   2. False
7. Managers use standardized recipe cost sheets to calculate their total recipe costs and their individual portion costs.
   1. True
   2. False
8. Most kitchen theft by employees deals with the removal of money rather than food products.
   1. True
   2. False
9. Head size has no effect on the cost per serving of draft beer.
   1. True
   2. False
10. Sales mix is defined as the series of consumer purchasing decisions that result in an operation’s specific food or beverage cost percentage.
    1. True
    2. False