CCA CCA Cost Control & Purchasing 2 — Questions and Answers
Question 1: What is the break-even point for a food service operation?
- The point where food cost equals 30%
- The level of sales at which total revenue equals total costs, resulting in neither profit nor loss (Correct answer)
- The minimum number of covers needed per service
- The point where labor cost equals food cost
Correct answer: The level of sales at which total revenue equals total costs, resulting in neither profit nor loss
The break-even point is when total revenue equals total costs (fixed + variable), meaning the operation covers all expenses but generates no profit.
Question 2: What is prime cost in a restaurant?
- The cost of the highest quality ingredients
- The combined total of food cost and labor cost (Correct answer)
- The cost of the most expensive menu item
- Fixed overhead costs including rent and utilities
Correct answer: The combined total of food cost and labor cost
Prime cost is the sum of food and beverage cost plus total labor cost (including wages, benefits, and payroll taxes), typically the two largest controllable expenses in a restaurant.
Question 3: What is the purpose of a standardized recipe in cost control?
- To ensure consistent quality and portioning, enabling accurate costing and predictable food cost percentages (Correct answer)
- To limit the creativity of line cooks
- To track which menu items are most popular
- To meet USDA labeling requirements
Correct answer: To ensure consistent quality and portioning, enabling accurate costing and predictable food cost percentages
Standardized recipes ensure consistent yield, portion size, and quality, which are essential for accurately calculating food cost and maintaining predictable food cost percentages.
Question 4: Which pricing method calculates menu price by multiplying food cost by a factor derived from the desired food cost percentage?
- Competitive pricing
- Factor pricing method (Correct answer)
- Contribution margin method
- Loss-leader pricing
Correct answer: Factor pricing method
The factor pricing method multiplies the plate cost by a pricing factor (100 ÷ desired food cost %) to arrive at the menu price, ensuring the desired food cost percentage is achieved.
Question 5: What is 'shrinkage' in the context of meat purchasing and cost control?
- The decrease in menu prices during off-peak hours
- The loss of weight and volume that occurs when meat is cooked due to moisture and fat loss (Correct answer)
- The practice of purchasing smaller cuts
- Theft of food products by employees
Correct answer: The loss of weight and volume that occurs when meat is cooked due to moisture and fat loss
Shrinkage refers to the weight loss that occurs when meat is cooked, as moisture evaporates and fat renders out, which must be accounted for when calculating portion costs.
Question 6: What is the contribution margin of a menu item?
- The total revenue generated by the item
- The selling price minus the food cost of the item (Correct answer)
- The food cost percentage of the item
- The number of times the item is sold in a period
Correct answer: The selling price minus the food cost of the item
The contribution margin is the selling price minus the variable food cost, representing how much each sale of that item contributes toward covering fixed costs and profit.
CCA CCA Cost Control & Purchasing 2
What is the break-even point for a food service operation?