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Food & Beverage Cost Controls

Course Code: HOSP 2330
Faculty: Commerce & Business Administration
Credits: 3.0
Semester: 15 Weeks X 4 Hours Per Week = 60 Hours
Learning Format: Lecture, Seminar
Typically Offered: TBD. Contact Department Chair for more info.
course overview

This course focuses on the principles and procedures involved in an effective system of food, beverage and labour controls for the hospitality industry. This course provides the fundamentals for gathering information, developing forms and procedures, assessing and evaluating the information and applying the results to maintain efficient food, beverage and labour cost control. Topics include: the basic control procedures used, food and beverage costing, labour cost analysis, pricing methods and computer applications. A restaurant management simulation program exercise is incorporated to enhance the cost control theory.

Course Content

  1. The importance of effective cost control in the food and beverage industry
  2. The development and use of standards including average check, forecast sales, food and beverage cost percentages, labour productivity, and other cost percentages as a means to identify cost control problems
  3. The role of the operating budget in planning and cost management
  4. Calculating actual food cost and food cost percentage
  5. Developing standard food cost and food cost % given standardized recipes and sales history
  6. Control considerations in the areas of food purchasing, receiving, storage, issuing production and service
  7. Calculating actual and standard beverage cost and beverage cost percentages
  8. Unique control considerations in the areas of beverage purchasing, storage, issuing, production and service
  9. The mechanism and principle behind basic inventory control for a beverage operation
  10. Revenue control systems including prechecking, guest check controls and cashiering controls in food and beverage operations
  11. Labour cost control practices in food and beverage
  12. Scheduling and human resource management issues in food and beverage operations and how these impact labour cost
  13. Calculating, interpreting and using productivity ratios for labour cost control
  14. Developing and using usage ratios for control of other operating expenses
  15. Scientific and qualitative menu pricing considerations
  16. Analysis of a menu for profitability and popularity
  17. Functions and control applications of a POS
  18. Using spreadsheets to develop flexible budgets
  19. Using breakeven analysis in decision making and planning
  20. Employee and customer theft; how and why it happens; how it can be detected
  21. Analysis of income statements, average check, cost and net income per guest figures. 
  22. The role of computers to assist with purchasing functions, controlling inventory, analyzing business and determining personnel requirements, controlling labour costs, generating daily reports of costs and sales for management, and budgeting and preparing financial statements. 
  23. Control systems commonly used within the rooms department of a hotel to control sales, energy costs, labour costs and rooms supplies expense

Methods of Instruction

This course uses lectures, computer lab sessions and case studies.  Students are encouraged to participate in group discussions of case studies and control experiences.

Means of Assessment

Assignments                         20-30%

Term Project                         20-30%

Mid-term examinations          20-30%

Final Examination                  20-30%



Learning Outcomes

The student will be able to:

  1. Calculate actual and standard food cost and beverage cost for an operation manually and using a spreadsheet
  2. Distinguish between standard, actual and budget food cost and food cost %
  3. Develop and use an inventory control system for beverage control
  4. Use revenue, covers and average cheque historicals to forecast sales
  5. Discuss the importance of cost controls in the successful operation of a food and beverage business
  6. Create and use a budget for identifying control issues
  7. Use a spreadsheet to develop a flexible budget
  8. Use breakeven analysis for planning and decision making
  9. Understand and identify control procedures, forms and systems used in the purchasing, receiving, storage, issuing, production and service of both food and beverage
  10. Create and use labour productivity standards
  11. Discuss the role of effective human resource management in reducing labour cost
  12. Create and use a staffing guide and align to budget
  13. Discuss the control of other direct operating costs
  14. Analyze a menu’s pricing structure with respect to profitability and popularity
  15. Set menu prices both scientifically and with qualitative considerations
  16. Discuss the concept of sales mix and the role it plays in food and beverage cost
  17. Discuss the applications for computers and Point of Sales systems in food and beverage control
  18. Interpret POS generated management reports
  19. Discuss the importance of sales (revenue control) and systems which can be put in place to minimize losses
  20. Discuss the increasing role of technology on control
  21. Discuss the importance of planning, supervision and staff training in controlling costs
  22. Identify employee, and customer theft risks and current preventative measures commonly used in the industry
  23. Discuss major control issues in the rooms department of a hotel
  24. Make decisions which maximize profitability through control of costs.

course prerequisites

HOSP 1145 and HOSP 1235 and  (HOSP 1210 or  ACCT 1110) or currently active in the:
PDD in Hospitality Management  or
PBD Hospitality Services Management.

curriculum guidelines

Course Guidelines for previous years are viewable by selecting the version desired. If you took this course and do not see a listing for the starting semester/year of the course, consider the previous version as the applicable version.

course schedule and availability
course transferability

Below shows how this course and its credits transfer within the BC transfer system. 

A course is considered university-transferable (UT) if it transfers to at least one of the five research universities in British Columbia: University of British Columbia; University of British Columbia-Okanagan; Simon Fraser University; University of Victoria; and the University of Northern British Columbia.

For more information on transfer visit the BC Transfer Guide and BCCAT websites.


If your course prerequisites indicate that you need an assessment, please see our Assessment page for more information.