Question 1

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

Accepted Answer

False

Question 2

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

Accepted Answer

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.

Accepted Answer

The food cost percent shown for each individual menu item on a pre-cost and abstract form is typically a standard cost percent, which is based on standard recipe costs and selling prices, not on actual costs which can vary due to price fluctuations and portioning differences.

Question 4

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

Accepted Answer

Standard cost percent is a pre-determined or budgeted cost, reflecting the ideal cost situation, while actual cost percent represents what the restaurant actually spends on food or beverages in relation to sales, which can vary due to various factors such as waste, theft, or portion control issues.

Question 5

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

Accepted Answer

A menu precost and abstract requires a forecast of portion sales to accurately estimate the cost of ingredients and other expenses related to each menu item, ensuring the menu is financially viable.

Question 6

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

Accepted Answer

Potential savings refer to the amount of money that could be saved if operations were performed at their most efficient level, which is the difference between the actual cost incurred and the standard (or expected) cost of those operations.

Question 7

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

Accepted Answer

Calculating potential savings daily allows for more immediate identification and action on saving opportunities, making the process more timely compared to less frequent, periodic calculations.

Question 8

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

Accepted Answer

There is no industry-wide standard for acceptable discrepancies between actual and standard cost percents as this can vary significantly depending on the industry, company size, and specific operational practices.

Question 9

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

Accepted Answer

The answer of "Potential savings"
and "excessive cost"
are two different terms...

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.

Accepted Answer

Standard costs are predetermined or estimated costs, and actual costs can be either higher or lower than these estimates depending on various factors such as changes in prices, efficiency levels, and operational practices.

Question 11

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

Accepted Answer

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

Accepted Answer

The right side of the menu is precosted and abstracted before sales have taken place. This is done so that the restaurant can accurately track its costs and profits.

Question 13

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

Accepted Answer

The standard portion cost is the same on both the left and right sides of the menu precost and abstract form, as it represents the cost of producing a single portion of the menu item.

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:

Accepted Answer

The potential savings is the difference between the standard cost and the actual cost, which is $35,000 - $32,000 = $3,000.

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:

Accepted Answer

The actual cost percent is calculated as (Actual Cost / Sales) * 100 = ($49,000 / $140,000) * 100 = 35%. The standard cost percent is 5.0% lower than the actual cost percent, so it is 35% - 5% = 30%.

Question 16

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

Accepted Answer

The correct choice is B) $7000, as it is the only complete and plausible option provided for potential savings.

Question 17

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

Accepted Answer

Pilferage and overproduction lead to an increase in actual costs because they result in unnecessary expenses and wastage, which are reflected in the actual costs incurred by a business.

Question 18

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

Accepted Answer

When the standard portion size for an item is increased, both the actual portion cost and the standard portion cost will increase because the cost is directly related to the size of the portion. The standard portion cost increases as it reflects the new, larger portion size set by management, and the actual portion cost increases because it is based on the actual ingredients used, which will now be in larger quantities to meet the new standard.

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:

Accepted Answer

The dollar difference between actual cost and standard cost can be viewed both as waste (since it represents additional costs incurred beyond the planned or standard cost) and as potential savings (since it highlights an area where costs could potentially be reduced in the future).

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.

Accepted Answer

To calculate potential savings as a percentage of sales, first determine the standard cost for the month and compare it to the actual cost. The standard cost is calculated by multiplying the number of items sold by the portion cost for each menu item: (400 * $2) + (500 * $3) + (600 * $4) = $800 + $1500 + $2400 = $4700. The actual cost is $5100, so the potential savings is $5100 - $4700 = $400. To find this as a percentage of sales, divide the potential savings by the total sales and multiply by 100: ($400 / $12000) * 100 = 3.3%.

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