Hospitality Cost Control

Allen B.Asch

Chapter 6

Problem Solutions By:

Eimantas Klimas ;
Andrew Paralias

2017
Solutions:
1.The Receiving sheet, is an item,which includes a list of all of the delivery invoices for the day.
This acts as a checks and balancing system for the appropriate departments. This allows for control
over the flow of food and food cost.

2. Directs: Products, which go directly to the departments bypassing the storeroom and are directly
credited to the departments as this is done.

Stores: Are products , which go to the warehouse and are distributed as needed. The Costs are
billed to the departments after delivery.

3. Principle one : Practise of FIFO:First in First out.

Principle Two: The maintance of storage standarts

Principle Three: Proper Control of Inventory and standart Control

4. FIFO storage practises includes a certain way of rotating the good, which simply means , that
older products are used first. FIFO Inventory control covers other practises implimented during
FIFO such as theft minimisation,quality protection and accessibility of the product.

5.

6 CANS 1.39 $ 8.34 $

12 CANS 1.46 $ 17.52 $
6 CANS 1.35 $ 8.1 $
12 CANS 1.41 $ 16.92 $
Total Outlay of Money 50.88 $

FIFO:

12x1.41=16,92 $
6x1.35=8.1 $
4x1.46= 5.84 $

Inventory Left: 30.86 $

Food Cost: 20.02 $

LIFO:

6 x1.39=8.34 $
12x 1.46=17.52 $
4x 1.35= 5,4 $

Inventory Left: 31.26 $

Food Cost: 19.62 $

Weighted Average Price Method:

Total Cans Purchased: 36 CANS
Total Outlay of Money: 50.88 $
Average Cost: 1.41 $

Inventory Left Cost: 31.02 $

Food Cost: 19.86 $

Actual Price Method:

Impossible to determine of the same as FIFO

Last Price:

Inventory Shelf Cost: 31.02 $

Food Cost: 19.86 $

7.

(34362+25435)/2=29898

181456-25435+34362=190383

190383/29898=8 Turnover rate

8.

The Industry could be not Utilised in specific types of restaurants, that either require a higher or
lower inventory turrnover due to the nature of Institution. Fast food restaurants are an example of
this, which have a massively Higher Inventory Turnover.

9.

9 8.25 74.25 $
6 8.44 50.64 $
12 8.65 103.8 $
18 8.78 158.04 $
6 8.50 51 $
Total Outlay of Money 437.74 $

FIFO:

6x8.59=51 $
6x8.78= 52.68 $

Total Inventory Left: 103.68 $

Food Cost: 334.05 $

LIFO:
9 x 8.25= 74.25
3 x 8.44= 25.32

Total Inventory Left: 99.57 $

Food Cost: 338.16 $

Actual : Impossible or the same as FIFO

Weighted Average:

Total Cans: 51

Average Can price:

437.73 / 51 = 8.58 $

Inventory Left: 8.58x12= 102.96 $

Food Cost: 334.77 $

Last Purchase Price:

Inventory Left: 12x8.59=102$

Food Cost: 335.73 $

10.

11254+13789/2=125215

259500+11254-13789=256965

256965/125215= 20.5 Turnovers

11.

Receiving: If a smaller amount of product or of lower quality is received and not properly
inspected, food cost is affected as income is lost.

Storage: Improper storage can lead to a premature expiration of a product again losing income.

Inventory Valuation: Atributing an improper amount to a product will lead to incorrect food cost
calculations.

12.

Due to simple biological fact. For example if you take fish and eggs, they will spoil at extremely
different rates when left alone and both have ideal conditions to repress this to a minimum.

13.

25 1.59 $ 39.75 $
20 1.69 $ 33.8 $
30 1.61 $ 48.3 $
20 1.52 $ 30.4 $
Total Outlay of Money 152.25 $

FIFO:
20x1.52=30.4 $
10x1.61=16.1 $

End Inventory: 46.5 $

Food Cost: 105.75 $

LIFO:

25x1.59=39.75 $
5x1.69=8.45 $

End Inventory: 48.2 $

Food Cost:104.05 $

Weighted Average:

Total Beef: 95

152.25/95=1.6 $
Ending Inventory: 48 $
Food Cost: 104.25 $

Last Sale:

Ending Inventory: 30x1.52=45.6 $

Food Cost: 152.25-45.6=106.65 $

14. The F&B inventory turnover average is Between 20 and 25 times a year.

15.The F&B Inventory turnover average for a fast food restaurant is ussually 150 times a year.