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Advanced Food and Beverage Exam 1 Questions with Correct Answers
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Advanced Food and Beverage Exam 1 Questions with Correct Answers
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Advanced Food and Beverage Exam 1Questions with Correct Answers
absence of implemented accounting system - Answer-most important
-You cannot manage what you cannot count
-directly correlated to how well the owner is managing his "books"
-P&L and balance sheet alone may not be adequate for evaluating the financial health
of a restaurant
-all other "red flags" can't be accurately identified or evaluated if account system is not
set up and implemented properly
Key Operating expenses too high - Answer--usually restaurant prime costs account for
65-70 cents of every dollar in restaurant sales
- usually if prime cost percentage exceeds 70% (or 65%) a red flag is raised, unless the
restaurant has a very favorable rent expense (e.g. less than 4% of sale)
Menu items not accurately documented... - Answer--many operators tend to simply rely
on "subjective" menu pricing method
- it takes a lot of discipline and time to carefully and accurately document and cost menu
items
- "how can operators possibly manage their restaurants food costs if they don't even
know what each and every item is costing them"F
Food and Beverage inventory levels counted and costed - Answer--important to count
and cost F&B inventory levels at the end of each accounting period
- Monthly F&B purchases are not the same as the monthly usage
- To calculate an accurate food cost, you need to understand the beginning and ending
inventory
Food and Bev inventory levels too high relative to corresponding sales - Answer-- too
much food sitting in your storage will result in excess waste, over-portioning, and
employee theft (ties up most valuable asset, cash)
- How do you determine how much inventory is too much or what the ideal amount of
inventory is
-A typical full service restaurant should have on average no more than 7 days of
inventory
Causes of excess cost in foodservice - Answer-IFEW
- Inefficiency
- Fraud
- Errors
- Waste
, Daily & Weekly financial operating data not collected, reviewed or acted upon - Answer-
Every chain restaurant generates some type of daily and weekly report
*3 daily numbers recommended
- a daily sales report
-a menu item sales report
- an hourly staff labor report
Lack of understanding how to read and interpret period ending financial statements -
Answer--3 fundamental financial reports
- profit and loss statement
-balance sheet
-statement of cash flows
Operators can recognize problem areas simply by reading the financial statements
-once they read that info, they can begin identifying the "red flag"
Red Lobster - Answer--lost 3.3 million on a seven week promotion
- Darden Replaced president of Red Lobster
Top 10 Growth Chains - Answer-10) Zaxby's
9) Wawa
8) Dave & Busters
7) Domino's
6) Firehouse Subs
5) Chick-Fil-A
4) Raising Cane's Chicken Fingers
3) Wingstop
2) Marco's Pizza
1) Jersey Mike's Subs
Fixed Costs - Answer-costs unaffected by changes in sales
ex: depreciation on equipment, Real estate taxes and rents, repairs and maintenance
-don't change from one accounting period to the next
Variable Costs - Answer-Costs clearly related to business volume
- food and bev costs
-As business volume increases, variable costs will increase
-directly linked to volume of business
- total directly variable costs increase or decrease in direct proportion to sales volume
Sales= - Answer-Variable cost + fixed cost + profit
Variable rate= - Answer-Variable cost/ sales
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