Cost Control in Food and Beverage Companies

approach Control in Food and deglutition CompaniesProduct oriented companies create a production budget which estimates the number of units that must be manufactured to meet the sales goals. The production budget also estimates the various cost involved with manufacturing those units, including tire out and material.Cash Flow/Cash budgetThe gold scat budget is a prediction of future cash receipts and expenditures for a particular quantify period. It usually upholds a period in the short term future. The cash flow budget helps the business determine when income will be sufficient to cover expenses and when the comp whatsoever will need to seek outside financing.Marketing budgetThe marketing budget is an estimate of the funds needed for promotion, advertising, and public relations in order to market the product or service.Project budgetThe project budget is a prediction of the costs associated with a particular company project. These costs include labour, materials, and other re lated expenses. The project budget is often broken down into specific tasks, with task budgets assigned to each.Revenue budgetThe Revenue figure consists of revenue receipts of government and the expenditure met from these revenues. Tax revenues are made up of taxes and other duties that the government levies.Expenditure budgetA budget emblem which include of spending data spots.(Arthur Sheffrin, 2003)What is fixed cost?Fixed cost is defined as hey do not vary proportionally with volume, but rarely are they completely fixed in real sense. They might fluctuate for other reasons. (Ojugo, 1999,p349 )Variable costVariable cost are those cost which increment in volume with the increase in production and decrease in volume with decrease in production as material cost, labour cost, power, repair, give notice etc. variable cost changes in direct proportion to the level of production. (Gupta et al. 2007)What is cash flow affirmation?Cash flow statement is the financial record that p rojects what your business plan means in terms funds. It is same as a budget. It projected statement used for internal planning and estimates how much money will flow into and out of a business during a designated period of time, usually the coming tax year. (Jinnet Pinson, 2006)Advantages of cash flow statementCash flow statement act as an essential tools of short term financial analysis and planning. The main advantages are listed belowCash flow statement is in truth useful in preparing cash budget as cash is the very basis of business operations cash flow proves very useful in evaluating the cash position of the concernThe projected cash flow statement helps finance manager in exploring the possibilities of repayment of long term debts which depends upon the availability of cashCash flow statement can be used for making appraisal of various capital investment projects just to determine their liquidity and profitability.A comparison of the cash flow statement of pervious year an d projected cash flow statement reveals deviations of actual from budgeted.For payment of liabilities which are likely to arise immediately, cash is more important than working capital. Cash flow statement is certainly a better tool of analysis than funds flow statement as far as short term analysis is concerned.Cash flow statement enables the management to explain why the company is facing difficulties in paying dividend while it has earned good profits.It helps in taking loans from banks and other financial institutions the repayment capacity of the company can be understood by going through the cash flow statement.It supplements the analysis provided by funds flow statement as cash is a part of the working capital.What is be tag?A cost sheet is a statement of cost incurred, or to be incurred, for producing a given volume of output or for description services, as the case may be. Preparation of a cost sheet helps cost control and pricing decisions. (Banerjee, 2006)Cost sheet f or HospitalityThe standerised reciepe cost sheet is a record of the ingredient cost reqiured to produce an item sold by your operation. This standerised cost sheet can be created using any staple fiber spreadsheet software. (Dopson, 2010)Advantages of cost sheet in hospitalityNew employees can be better trained.Helpful to maintain food laws.Helpful to explain about any food item to the guest.Helpful for accurate acquire in order to gain profits out of business.Purchasing, receiving, storing and issuingPurchasingPurchasing can be defined as a function concerned with the search, selection, purchase, receipt, storage and final use of a commodity in accordance with the catering policy of the establishment.Types of getBlanket OrdersA Blanket leveraging Order is a type of purchase order designed to consolidate repetitive small purchases from a virtuoso supplier. It is essentially a form of open account which is limited in terms of the things which can be ordered, who can place the or ders, the period for which it is to be open, and the heart amount which can be ordered. This form of purchase order is useful for departments that have repetitive supply needs.Standing OrderA Standing Purchase Order is purchasing method used in purchasing leases (e.g. auto, property and equipment), and equipment maintenance. Generally speaking, equipment maintenance orders are set up for one year. Standing orders for leases should be created for the term of the lease.Regular Purchase OrderThe Purchase Order (Regular) is the basic purchasing system for making single instance purchases. It is a contract providing for the economy by a specific date of listed goods or services at a predetermined price.Source -www.urmc.rochester.eduObjectives of receiving, storing and issuingReceivingQuantity of an item delivered must touch the quantity orderedQuality of an item delivered must be the same as the quality orderedPrice on the invoice for each item delivered should be the same as the pric e quoted or listed when the order was placedStoringPrevent pilferageEnsure accessibility when products are neededPreserve quality way outTo ensure the timely release of items from inventory in the needed quantitiesTo prevent the misuse of items between release from inventory and delivery to the required departmentReferencesBanerjee, B. (2006). Cost Accounting Theory And Practice (12th ed.). New Delhi Prentice Hall of India.Dopson, L. R. (2010). Food and Beverage Cost Control (5th ed.). Canada John Wiley and sons, Inc.Jinnet, L. P. (2006). Small Buisness Start-Up (6th ed.). Chicago Kalpan Publications.Ojugo, C. (1999). Food Beverage Cost Control (2nd ed.). New York Delmar.S.P.Gupta, Ajay Sharma, Satish Ahuja. (2007). Cost Accounting (1st ed.). New Delhi V.K. Enterprises.Sullivan, Arthur Steven M. Sheffrin (2003), Economics Principles in action. Upper Saddle River, New Jersey Pearson Prentice Hallhttps//www.urmc.rochester.edu/purchasing/purchaseorder.cfm