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.
- The importance of effective cost control in the food and beverage industry
- 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
- The role of the operating budget in planning and cost management
- Calculating actual food cost and food cost percentage
- Developing standard food cost and food cost % given standardized recipes and sales history
- Control considerations in the areas of food purchasing, receiving, storage, issuing production and service
- Calculating actual and standard beverage cost and beverage cost percentages
- Unique control considerations in the areas of beverage purchasing, storage, issuing, production and service
- The mechanism and principle behind basic inventory control for a beverage operation
- Revenue control systems including prechecking, guest check controls and cashiering controls in food and beverage operations
- Labour cost control practices in food and beverage
- Scheduling and human resource management issues in food and beverage operations and how these impact labour cost
- Calculating, interpreting and using productivity ratios for labour cost control
- Developing and using usage ratios for control of other operating expenses
- Scientific and qualitative menu pricing considerations
- Analysis of a menu for profitability and popularity
- Functions and control applications of a POS
- Using spreadsheets to develop flexible budgets
- Using breakeven analysis in decision making and planning
- Employee and customer theft; how and why it happens; how it can be detected
- Analysis of income statements, average check, cost and net income per guest figures.
- 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.
- 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
Term Project 20-30%
Mid-term examinations 20-30%
Final Examination 20-30%
STUDENTS MUST COMPLETE ALL COMPONENTS OF THE COURSE TO OBTAIN CREDIT FOR THE COURSE.
The student will be able to:
- Calculate actual and standard food cost and beverage cost for an operation manually and using a spreadsheet
- Distinguish between standard, actual and budget food cost and food cost %
- Develop and use an inventory control system for beverage control
- Use revenue, covers and average cheque historicals to forecast sales
- Discuss the importance of cost controls in the successful operation of a food and beverage business
- Create and use a budget for identifying control issues
- Use a spreadsheet to develop a flexible budget
- Use breakeven analysis for planning and decision making
- Understand and identify control procedures, forms and systems used in the purchasing, receiving, storage, issuing, production and service of both food and beverage
- Create and use labour productivity standards
- Discuss the role of effective human resource management in reducing labour cost
- Create and use a staffing guide and align to budget
- Discuss the control of other direct operating costs
- Analyze a menu’s pricing structure with respect to profitability and popularity
- Set menu prices both scientifically and with qualitative considerations
- Discuss the concept of sales mix and the role it plays in food and beverage cost
- Discuss the applications for computers and Point of Sales systems in food and beverage control
- Interpret POS generated management reports
- Discuss the importance of sales (revenue control) and systems which can be put in place to minimize losses
- Discuss the increasing role of technology on control
- Discuss the importance of planning, supervision and staff training in controlling costs
- Identify employee, and customer theft risks and current preventative measures commonly used in the industry
- Discuss major control issues in the rooms department of a hotel
- Make decisions which maximize profitability through control of costs.
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.
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.
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.