Deck 10: Monitoring Foodservice Operations III: Actual Versus Standard Food Costs

Question 1

A menu precost and abstract is used to predict actual cost for a future period or date.

Answer 1

False

Question 2

Standard portion costs are normally cost estimates made by a chef.

Answer 2

False

Question 3

On the menu precost and abstract form, the food cost percent shown for each individual menu item listed is a standard cost percent, not an actual cost percent.

Answer 3

True

Question 4

In most restaurants, standard cost percent and actual cost percent are the same.

Question 5

A menu precost and abstract incorporates a forecast of portion sales, and cannot be prepared without such a forecast.

Question 6

Potential savings may be defined as the difference between actual cost and standard cost.

Question 7

One advantage of calculating potential savings daily rather than periodically is the timeliness of the result.

Question 8

The industry-wide standard for acceptable discrepancies between actual and standard cost percents is 1.0%.

Question 9

"Potential savings"
and "excessive cost"
are two different terms for the same concept.

Question 10

If actual and standard costs for a given month are not the same in a particular restaurant, one would normally expect standard cost to be the higher figure.

Question 11

The total cost for all items sold as determined on the right side of the menu precost and abstract is:

A) actual cost for the day or period covered by the menu precost and abstract
B) number of sales forecasted multiplied by standard portion cost
C) standard cost for the day or period covered by the menu precost and abstract

Question 12

The right side of the menu precost and abstract is completed_____sales have taken place.

A) before
B) after
C) either before or after, depending on the decision of management in a particular restaurant.

Question 13

The standard portion cost for a menu item as shown on the menu precost and abstract is:

A) the same on both the left and right sides of the form
B) typically higher on the right than on the left
C) typically higher on the left than on the right

Question 14

Actual cost for March in a nearby restaurant was $35,000, and standard cost for the same period was $32,000. Sales were $100,000 for the month. Given this information, one can determine that potential savings for the period was:

A) 32.0%
B) $3,000
C) neither (a) nor (b) is correct

Question 15

In Fribney's Restaurant, actual cost for September was $49,000. Sales for September were $140,000. Standard cost percent was 5.0% lower than actual cost percent. Standard cost percent was:

A) 5.0%
B) 30.0%
C) 35.0%

Question 16

Given the information in 5 above, potential savings for September is calculated to be:

A) $2450
B) $7000
C) the

Question 17

Pilferage and overproduction are two important causes of unwarranted increases in:

A) standard costs
B) forecasted costs
C) actual costs

Question 18

If management directs that the standard portion size for a given item will be increased, which of the following should also increase?

A) actual portion cost
B) standard portion cost
C) both (a) and (b) are correct

Question 19

If actual cost for a period is $47,250 and standard cost for that same period is $44,750, the dollar difference between the two figures can be viewed as:

A) waste
B) potential savings
C) both (a) and (b) are correct

Question 20

The owner of Snidley's Restaurant has developed a simple three-item menu for use in her establishment. Each menu item represents a complete meal. She has determined standard cost for each listed item and has kept careful records for the month of October. Given the information below, calculate potential savings as a percentage of sales for the month.
Menu Item Number Sold Portion Cost Sales Price
A 400 $2.00 $5.00
B 500 $3.00 $8.00
C 600 $4.00 $10.00
Actual cost for the month was $5,100, and sales were $12,000.

A) 1.0%
B) 2.7%
C) 3.3%