HM 351 Lecture Notes - Lecture 1: Variable Cost, Decimal Mark, Fixed Cost
3 Sep 2018
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Document Summary
Revenue: the amount of dollars you take in. Expenses: the costs of the items required to operate the business. Profit: the amount of dollars that remain after all expenses have been paid. Four major costs: food costs, beverage costs, labor costs, overhead costs utility, rent, equipment. Percentage calculation is more useful (due to inflation: food prices can change, etc. Food costs: the costs associated with actually producing the menu items, usually the largest of second largest expense category. Beverage costs: related to alcoholic beverages (beer, wine, liquor, may include ingredients (cherries, lemons, olives, juices, soda, etc) Labor costs: salary & wages, the cost of all employees necessary to run the business, about second largest expense. Overhead costs: all expenses that are neither food, beverage, nor labor, utilities, rent, linen, etc. Food cost % = food cost / food sales. Beverage cost % = beverage cost / beverage sales. Labor cost % = labor cost / total sales.
