INTRODUCTION

Cost Control

Any business dedicated to the marketing of food and beverages, regardless of its size, needs to be maintained.
cost control. Knowledge of costs is necessary to be able to sell and obtain profits.

There are many types of operation, each with its own control needs, but it is important to keep in mind that too much
control can be as bad or worse than having no control; and a very sophisticated and complex system can go against its own
purpose and being very costly for various reasons.

Finding the most suitable type and level for the operation can be one of the keys to maintaining good cost control, this controls the
flow of goods (food, beverages) and the operation of food and beverages in all its steps, levels, and sections according to the
systems, policies and procedures outlined by the company (general management and financial control). It also records and controls the
theoretical and physical consumables inventories; contracted external services; the debit and credit of these to the departments
users.

Organizational Chart

The Cost Controller reports to the Financial Controller and is operationally supervised by the Director of Food and Beverage in the
in the case of a hotel, or by the Manager or owner in the case of an independent restaurant, in turn, the Cost Controller supervises
directly the reception of goods and the warehouses.

In the case of a hotel, although the responsibility for food costs lies with the Chef and the responsibility for beverage costs lies with the Director of
Drinks, and both report to the Director of Food and Beverages, the Cost Chief controls the costs of food and beverages and
provides guidance and directions so that they are as close as possible to the budgeted costs. Cost control checks, analyzes and
report the variations of what was done in relation to what was planned (budgeted) and will make recommendations to the management and to the
operational departments when it is necessary to take corrective action or modify the potential costs.

The stages of cost control are:

Planning
Purchases
Warehouses and storage facilities

Food and beverage production (kitchen and bars)

Income
Other departments
Reports and controls
At the level of purchasing and warehouses, the flow of other inventories such as operating supplies is also controlled.
stationery, etc.

The cost manager prepares accurate reports, comparing what has been accomplished with the budget, and makes comments and recommendations about it.
content; assists the management in its analysis; participates in the preparation of budgets related to usage and consumption of
supplies, supervises the receipt of goods and warehouses, controls stock inventories in warehouses and equipment flows,
materials and supplies for the Food and Beverage department and for the hotel in general.

Observation: This deals with the topic of cost control, its philosophy, areas, needs, and control methods. Its organization is
flexible; it can be adapted to the operation, depending on its size and type. This program serves as a guide for effective and useful cost control.

Costs

The cost of a product is the price paid for a product when purchased that will be resold later, whether in the same condition.
whether it is purchased semi-processed or processed. The product can be sold whole or divided into portions.

Knowing the cost of a product allows the business owner to decide:

a) At what price can a product be sold to recover its cost

b) Recover the other expenses related to the operation
c) And calculate the desired profit

Obtaining the utility itself implies that a series of additional steps are carried out.

Every business requires:

• Planning: What do I want and what am I going to do to achieve the profits I set as a goal?
• Operation: Carry out the actions that I have planned,
• Control: To ensure that I am doing what I have planned and obtaining the results. The control of costs, way
part of the process of controlling a business. And if I don't have the desired results, I need to
• Correction: To be able to make corrective decisions to achieve the desired outcome.

Definitions

Below are some necessary definitions to understand the cost process:

1. RESTAURANT OR POINT OF SALE OF A AND B: UNIT OR LOCATION WHERE THE BUSINESS OF PURCHASE AND
SALE OF FOOD AND BEVERAGES FOR PROFIT.

2. Food: all those products that are eaten, sometimes in liquid form. It can be consumed in its natural state, raw,
semi-processed or processed (cold or hot). Coffee, milk, and juices are considered foods.

3. Beverages: ANY LIQUID PRODUCT THAT IS DRUNK, WHETHER IN ITS ORIGINAL STATE OR MIXED. THESE CAN BE
ALCOHOLICS OR NON-ALCOHOLICS. THEY MAY ALSO CONTAIN SOME INGREDIENT LIKE JUICE, WHICH, DESPITE
IF IT IS A FOOD, IT CAN BECOME A DRINK WHEN MIXED.

4. Product specifications: all products used in a business dedicated to the sale of food and beverages.
must be specified in advance. This process defines the degree of maturity, size, quality, appearance, date of
expiry and other qualities of the product that will be used or sold.

5. Recipe: FORM THAT HELPS TO RELATE THE PRODUCTS AND THE QUANTITIES OF THE SAME THAT
WILL BE PART OF A DISH AND IN WHICH THE COST AND THE SELLING PRICE OF IT CAN BE CALCULATED
PLATE.

6. Sales Forecast: IT IS THE PLAN THAT IS ELABORATED IN A SPECIAL FORM, WHERE THE
QUANTITIES OF EACH PRODUCT THAT YOU WANT TO SELL IN A PERIOD OF TIME AND HELP TO
DETERMINATION OF EXPECTED INCOME.

7. Production Program: based on the sales forecast, a production program is prepared that contains all the
quantities of the products that are needed to achieve sales, as well as the dates or times when they take place
the processes and the products are needed.

8. Budget: FINANCIAL RUNS IN WHICH INCOME, COSTS, PAYROLL, OTHERS ARE PROJECTED
EXPENSES, GROSS PROFIT, UP TO NET AFTER TAXES. Budgets are prepared for long terms.
(from one year to 10 years). The budget is prepared once and remains unchanged, as it is part of the strategy of the plan,
for the period that is budgeted. It is used to compare reality (results) against what was planned and to see how to adjust the
tactics (daily operations) to achieve the set objectives.

9. Warehouses: THEY ARE THE PLACES THAT ARE DESTINED TO STORE THE PRODUCTS THAT WILL BE USED IN THE
FOOD OR BEVERAGE PRODUCTION. These can have different characteristics depending on the type of product being produced.
store in them. Some that we will see in the course are: dry storage, cold storage, frozen storage, wine cellar. The
Warehouses can be subdivided by products.
 10. Purchases: THE PROCESS OF ACQUIRING THE NECESSARY PRODUCTS ACCORDING TO THE SPECIFICATIONS
BEST PRICE, ON TIME ACCORDING TO THE PRODUCTION PLAN AND UNDER THE BEST CONDITIONS
PAYMENTS THAT CAN BE NEGOTIATED.

11. Waste: those are parts of a product that will not be used for the preparation of a recipe. These can be dirty parts.
like a root, peel, bone, skin, nerve, tendon, etc. In the case of canned products, the loss might be the liquid in which
the product is preserved and will not be used in the preparation of the recipe. The loss must be known to deduct it from the weight.
of the product in order to obtain the net weight.

12. Cost: the cost of a product IS THE PRICE THAT IS PAID WHEN ACQUIRING IT IN THE CONDITION AND SIZE IT IS.

13. Clean product cost: it is the cost of the usable product, AFTER HAVING REMOVED THE WASTE. THIS IS THE
COST THAT IS CONSIDERED WHEN CALCULATING A RECIPE FOR DETERMINING THE SELLING PRICE OF
A dish.

14. Sales: PROCESS OF OFFERING AND SERVING THE PRODUCTS, AT THE STIPULATED PRICE. THESE ARE CONTROLLED
THROUGH A SYSTEM OF BOXES, COMMANDS AND MULTIPLE REPORTS.

EXAMPLE OF FORMAT FOR MERCHANDISE SPECIFICATIONS

UNIT OF
COST TYPE
UNIT OF BRAND O USE IN THE
DESCRIPTION PURCHASE SUPPLIER RECIPE
1.- Historical costs and real DATE O
REGISTRATION Olive Oil 1lt bottle. Carapelli ml. ANterior SE
OBSERVE Corn cooking oil 1 liter bottle. The Glory ml. REGISTERS
Previous, for White Vinegar 1 liter bottle. Herdez ml. TO DO
COMPARATIVES. Balsamic Vinegar 1 liter bottle. Carapelli ml.

2.- Costs determined y

defaults:

• Predetermined.- These are products in process, for which there is no certainty of consumption or sale.
• Determined.- When there is a production order.

3.- Fixed and semi-fixed costs:

 • Fixed.- remains unchanged, does not change, is constant and is not directly related to production (income from the establishment,
insurance payments, etc.)
• Semi-fixed.- These are expenses that arise unexpectedly, for example: overtime.

4.- Controllable costs: THEY DEPEND MOSTLY ON AN INTERNAL FACTOR

FROM THE ESTABLISHMENT (EMPLOYEE MEALS, CLEANING SUPPLIES, ETC.)

5.- Uncontrollable costs: DEPEND ON AN EXTERNAL FACTOR, EXAMPLE: TAXES, VAT, RENT, ETC.

6.- Estimated and standard cost:

• Standard: scientific and arithmetic calculations are used.

• Dear all: These are rough estimates.

CHAPTER 1: RECIPES

Food Recipe

It is important to plan a business in order to avoid unnecessary expenses and therefore losses that can lead to bankruptcy or
simply not being able to start the business due to lack of resources, for not having planned them. Thus, it begins with the creation of a
Concept and determine in this process what is going to be served, to whom, at what time, at what price, with what presentation, etc.
From this process, we arrive at the preparation of the recipes that will provide us with the necessary information for the planning phase, such as:

The name of the dish

The recipe number that serves for file control
Number of servings, informs us about the amount of food produced using the recipe.
The number of people serves to inform how many people the amount of food prepared will serve.
recipe. This is decided based on the weight allocated for each type of food.
The date of preparation of the recipe, this serves to have control over periodicity (when I prepare it and when I review it)
to have control over the validity of the costs of the goods and the selling prices.
The code can be alphanumeric, numeric, or alphabetic, depending on the accounting system that will be used. It serves
so that each product we use for the preparation of the recipe has an accounting record for later
warehouse and purchasing control.
 Ingredient is the name of the product used for the recipe (carrot, pumpkin, chicken thigh, etc.)
Quantity shows whole numbers or fractions (1, 3, 4 or 0.5, 0.75)
Unit is shown in kilograms, liters or their fractions (grams, milliliters) depending on the established policy.
A single measurement method must be respected in all cases to facilitate control and calculation. Avoid terms such as
pinch, teaspoon, handful, can, etc.
Unit price is the purchase cost of the product being used. Normally, the cost of the clean product is used.
free from loss or drainage.
The amount is the result of multiplying the quantity by the unit price.
Cost of raw materials is the total of the amounts of the products used for the recipe (raw material).
P/P cost is the cost of the raw material divided by the number of people for whom the recipe is made.
Unexpected is a number represented in pesos, but it is derived from a percentage that can range from 5% to 10% of
import of raw material and serves to have a margin for errors or to have a reserve in the production of the
recipe.

Example: if the total raw material is $150.00 for 10 people and we apply an unforeseen expense of 5%, the following is done:
$15.00 - 100%
? 5%
$0.75 + $15.00 =

Exercises for class:

- The total cost is the result of the sum of the cost per person and the unforeseen.

- The suggested price is the selling price of the product or the price that is intended to be charged when selling the product to recover the
costs, expenses and obtaining profits.
 Example: If the total cost is $15.75 and we want to obtain a cost percentage of 30%, the following is done:

$15.75 - 30%
? - 100%
=$ Suggested price.

Exercise for class:

- VAT is the value added tax that must be included in the sale price that the customer will pay, which will appear on the menu.
Oh menu.

Example: If our suggested price is $52.50, then the following is done:

$52.50 - 100%
? - 16%
=$ + $52.50 = Selling price
Exercise for class:

- Selling price is the sum of the suggested price plus VAT

- The Cost percentage is the percentage that we want to be part of the cost in the suggested selling price. This percentage
it usually ranges from 30% to 33% depending on the establishment's policy. The cost policy can be defined from the concept,
depending on the sales volumes that we want to achieve, as a promotional element (we increase the % of cost to
lower the selling price). Note: there are dishes that are very well accepted by customers or that have a greater symbolic value for
the customers that allow having a % of cost lower than the average indicated. See analysis of the star dish, cost dish, dish
unknown and dead plate.

- The factor is a multiplier used to facilitate the calculation of the selling price and to streamline the mathematical operation when
a price must be decided quickly or to fund a large number of recipes more quickly.
 Example: if our suggested price is $52.50 and the total cost is $15.75, then we do the following:

Exercise for class:

.

- Price adapted to the menu is the rounded Selling Price so that it does not contain fractions. The percentage of the cost and the factor.
the cost based on the adjusted or rounded selling price will vary

Example:
The selling price is $ but we would hardly put that price with decimals on our menu, or it turns out that we
We stepped out of the market regarding our competition, so we adapted the price; in this case, it is decided to sell the dish for $
70.00, this change in the selling price affects our cost and our factor, so we need to obtain that new data. It
do it as follows:

1.- We remove the VAT from the adjusted price: = $70.00 / 1.16 = Price without VAT
2.- We obtain the new % of cost: = $15.75 (total cost) / 60.34 = %
3.- We obtain the new factor: = 60.34 / 15.75 = Factor

Exercise for class:

Obtain the new prices excluding VAT, percentages and factors from the previous exercises according to adjustments.
Costing exercises in the following format:
1. Receta para 10 personas, total de materia prima $130.00, imprevisto del 5%, porcentaje de costo deseado 30% y ajuste a
$50.00
001 Servings: 10 People: 10

Cost of Raw Materials. 130.00

% of Cost 30%
Cost P/P 1:00 PM
Unforeseen events 0.65
Factor 3.33
Total Cost 13.65
Suggested Price 45.50
I.V.A. 7.28
I.V.A. 16 %
Sale Price 52.78
PRICE ADAPTED TO OUR MENU
Price Fixed including VAT 50.00
% of Cost %
I.V.A 6.90
Factor 3.33 Price without VAT 43.10

10 people
85.00.

002 Portions: 10 People: 10

Cost of raw materials. 190.00

% of Cost 30%
Cost P/P 7:00 PM
Unforeseen events 1.14
Factor 3.33
Total Cost 20.14
Suggested Price 67.13
I.V.A. 10.74
I.V.A. 16%
Selling Price 77.87
PRICE ADAPTED TO OUR MENU
Price Fixed with VAT 85.00
% of Cost 27.48%
Value Added Tax11.73
Factor 3.63 Price excluding VAT 73.27
10 people
003 Porciones: 10 People: 10

Cost of Raw Materials 55.00

% of Cost 30%
Cost P/P 5.50
Unforeseen events 0.55
Factor 3.33
Total Cost 6.05
Suggested Price October 20
VAT 3.21
V.A.T. 16 %
Selling Price 23.31
PRICE ADAPTED TO OUR MENU
Fixed Price with VAT 30.00
% of Cost 23.39%
I.V.A 4.14
Factor 4.27 Price excluding VAT 25.86
 Enrollment______________________

Exercise for class: Cost out the following recipes in the recipe costing format.

RESTAURANT NAME
Recipe number: EF001 Servings: 10 People: 10
Artichoke Salad DATE
Price
Code Ingredients Quantity One. Amount
Unitary
VER004Artichokes 0.300Kg. $ 140.00 42.00
ABT001 Olive oil 0.250 liters $65.00 16.25
ABT052 Dry white wine 0.250 liters $ 69.56 17.39
VER031Lemon 0.010Kg. $25.00 0.25
VER009White onion 0.150 Kg $17.78 2.66
VER024Fennel 0.100Kg. $116.67 11.66
VER005Apio 0.100Kg. $ 7.50 0.75
Cost of raw materials. 90.96
% of Cost 30.00%
Cost Per Piece 9.09
Unforeseen events 10% = 0.90
Factor
Total Cost 9.99
Suggested Price 33.30
I.V.A. 5.32
I.V.A. 16%
Selling Price 38.62
PRICE ADAPTED TO OUR MENU
Fixed Price with VAT 45.00
% of Cost 25.75%
I.V.A. 6.21
Factor 3.88 Price excluding VAT. 38.79
 RESTAURANT NAME
recipe_number SO001 Porciones: 10,000 People
Shrimp Soup DATE:
Price
Code Ingredients Quantity One. Amount
Unitary
Water 3,000 liters $ -
VER009White onion 0.125 Kg. $17.78 $ 2.22
VER040Poro 0.090Kg. $ 27.78 $ 2.50
VER005Apio 0.166Kg. $ 7.50 $ 1.24
CARROT 0.125Kg. $ 7.50 $ 0.93
VER034White papa alpha 0.100Kg. $ 12.00 $ 1.20
PYM003 Fresh salmon 0.375Kg. $105.00 $ 39.37
PYM001Small shrimp 0.750Kg. $180.00 $ 135.00
ABA052Sal 0.000Kg. $ -
ABA006Pepper 0.000Kg. $ -
LAC001 Sour Cream 0.100L $ 25.00 $ 2.5
Cost of Raw Materials 184.96
% of Cost 30.00%
Cost P/P 18.49
Unforeseen events 5% = 0.92
Factor 3.33
Total Cost 19.41
Suggested Price 64.70
V.A.T. 10.35
I.V.A. 16
Selling Price 75.05
PRICE ADAPTED TO OUR MENU
Price Fixed with VAT 80.00
% of Cost 28.14%
I.V.A. April 11
Factor 3.55 Price excluding VAT. 68.96
 NAME OF THE RESTAURANT
Prescription number: EC001 Servings: 10,000 People
Stuffed mushrooms with chicken DATE: 14/01/2002
Price
Code Ingredients Quantity One. Amount
Unitary
Giant mushrooms 0.500Kg. $28.89 $ 14.44
AVE003 Chicken breast 0.191Kg. $ 43.00 $ 8.21
Ground bread 0.070Kg. $ 21.74 $ 1.52
VER036Flat parsley 0.016 Kg. $104.00 $ 1.66
LAC003Butter 0.050Kg. $30.00 $ 1.5
VER009White onion 0.016 Kg. $ 17.78 $ 0.28
LAC007Fresh cheese 0.200Kg. $40.00 $ 8.00
ABA052Sal Kg. $ -
ABA053Pepper Kg. $ -
Cost of raw materials 35.61
% of Cost 30.00%
Cost P/P 3.56
Unforeseen events 8% = 0.28
Factor 3.33
Total Cost 3.84
Suggested Price 12.80
I.V.A. 2.04
I.V.A. 16
Selling Price 14.84
PRICE ADAPTED TO OUR MENU
Fixed Price incl. VAT 25.00
% of Cost 17.81%
I.V.A. 3.45
Factor 5.61 Price excluding VAT 21.55
 RESTAURANT NAME
Prescription number: PF001 Servings: 10,000 People
Beef stew with orange FECHA 01/14/2002
Price
Code Ingredients Quantity One. Amount
Unitary
Olive Oil 0.030 L $65.00 $ 1.95
CCF007Veal 1.800 kg $61.00 $109.80
Wheat flour 0.010Kg. $ 8.70 $ 0.08
VER009White onion 0.020Kg. $ 17.78 $ 0.35
VER002Garlic 0.006 kg $ 33.33 $ 0.19
Mushroom ball 0.250Kg. $ 28.89 $ 7.22
Bola tomato 0.250 Kg $ 16.84 $ 4.21
VER033Orange 0.150Kg $10.00 $ 1.50
Peas 0.020 Kg. $ 6:00 $ 0.12
Basil 0.010Kg. $104.00 $ 1.04
GAU001Potatoes with fine herbs 0.300Kg. $ 25.91 $ 7.77
GUA004Rice with corn 0.300Kg. $ 3.41 $ 1.02
Cost of raw materials 135.25
% of Cost 30.00%
Cost P/P 13.52
Unexpected events 8% = 1.08
Factor 3.33
Total Cost 14.60
Suggested Price 48.66
I.V.A. 7.78
I.V.A. 16
Selling Price 56.44
PRICE ADAPTED TO OUR MENU
Price Fixed including VAT 60.00
% of Cost 28.22%
I.V.A. 8.28
Factor 3.54 Price excluding VAT 51.72
Conversions

When costing a recipe, a uniform criterion for the measures and units used must be established to avoid confusion and
calculation errors. For this, conversion tables are created to achieve such uniformity. One reason why it has to be
carrying out the conversion is because producers and suppliers may have measurement systems different from those needed
in food production.

The same is needed to convert products sold in imperial measurements to metric measurements.

SOLID CONVERSIONS IN WEIGHT

INGREDIENT
1/4 30g 1 oz.
1/3 45g 1 1/2 oz.
1/2 60g 2 oz.
Flour 2/3 90g 3 oz.
3/4 100g 3 1/4 oz.
1 125g 4 oz. (1/4 lb)
2 250g 8 oz.

1/4 50g 1 3/4 oz.

1/3 60g 2 oz.
Sugar 1/2 100g 3 1/4 oz.
2/3 135g 4 1/2 oz.
3/4 150g 5 oz.
1 200g 6 1/2 oz.

1/4 60g 2 oz.

 1/3 75g 2 1/2 oz.
Butter 2/3 150g 5 oz.
3/4 180g 6 oz.
1 200g 6 1/2 oz.

MEASURES AND EQUIVALENCES

1 piece. 1 small piece. 1 cup

Yeast 5g 3gr 120g
Salt 12gr 5gr 260g
Cocoa 3gr 1gr 75g
Powdered milk 3gr 1g 100gr

TABLE OF CONVERSIONS AND MEASUREMENTS

LIQUID CONVERSIONS MEASUREMENT TABLE

1 cda 15ml
Mugs Metric Imperial 1cdita 5ml
2cdas 30ml 1 fl oz. 1 cup 240ml
1/4 cup 60ml 2 fl oz. 1 oz. 28g
1/3 cup 70ml 2 1/2 fl oz. 1 fl oz. 30ml
1/2 cup 125ml 4 fl oz. 1 lb. 454g
3/4 cup 150ml 5 fl oz. 1 Gal. 3.75 liters
1 cup 250ml 8 fl oz.
1 1/2 cup 375ml 12 fl oz.
2 cups (US pint) 500ml 16 fl oz.
2 1/2 cups 600ml 20 fl oz. TEMPERATURES
3 cups 750ml 25 fl oz. Celsius
4 cups (US quart) 1 liter 33 fl oz. 215 420
204 400
Note: 200 392
When measuring in cups, make sure that 190 374
the product does not 180 356
 Nod, leave it like that and not
I filled it out again 170 338
165 39
At the time of measuring tablespoons or teaspoons 160 320
both must be breeds 150 302
140 284
130 266

It is equivalent to Unit of
Article Parts
sale
Swiss chard 1 BUNCH 200 GRS PZA
Agua Cali 4 1 KG KG / GRS
HASS AVOCADO 3 1 KG KG / GRS
SHELL AVOCADO 8 1 KG KG / GRS
GARLIC IN MESH 4 250 GRS PZA
ARTICHOKE 5 1 KG KG / GRS
ARTICHOKE PAELLA 10 1 KG KG / GRS
ALFALFA 1 BUNDLE 150 GRS PZA
SPROUTED ALFALFA 1 PAQ. 250 GRS KG / GRS
ANGU 1 PAQ. 250 GRS KG / GRS
IMPORTED APIO 1 BAG 1 KG KG / GRS
NATIONAL APIO 1 1 KG KG / GRS

Unit of
Article Pieces Equivalent to
sale

Cooked Acamay 15 1 KG KG / GRS

COOKED CLAM 20 1 KG KG / GRS
SPANISH CLAM RUBY 25 1 KG KG / GRS
LIVECLOCHE 12 1 KG KG / GRS
Frog Legs 10 1 KG KG / GRS
 ANGLE 1 PAQ. 1 KG KG / GRS
SQUID RING 20 1 KG KG / GRS
WHOLE HERRING 5 1 KG KG / GRS
WHOLE TUNA 1 5 KG KG / GRS
FRESH TUNA FILLET 8 1 KG. KG / GRS
SLICED FRESH TUNA 4 1 KG. KG / GRS
FLAG 2 1 KG KG / GRS
FILET FLAG 10 1 KG KG / GRS
Wand 1 3 KG KG / GRS
BREADING FISH STICK 20 1 KG KG / GRS

Coding

It is recommended to assign a code to all products found in an establishment. These codes are determined
normally based on the coding that the chart of accounts of the accounting system to be used has. Almost all the
Encoding methods look similar. Nowadays, barcode labels are used on all packaged products.
and these can be used by the establishment. For perishable items that do not have packaging or containers that allow them to be placed in a
barcode, the code designated by the chart of accounts is used.

The use of the code facilitates the tracking of a product within the establishment, from the moment it enters and is placed in the warehouse.
passing through its sale and collection. It is equivalent to an identification or birth certificate.

Presentation / photography

Standard recipes are generally accompanied by a photo that illustrates the presentation of the dish. This is very important for the
consumer's eyes. There is an opportunity to develop creativity by presenting the dishes in an appetizing way.