Kitchen Financial Management Flashcards

A restaurant's beginning inventory is $8,000, purchases are $22,000, and ending inventory is $6,000. What is the cost of goods sold?

Answer: $24,000

COGS = beginning inventory + purchases - ending inventory, so $8,000 + $22,000 - $6,000 = $24,000.

A menu item has a food cost of $4.50 and the target food cost percentage is 30%. What should the menu price be?

Answer: $15.00

Menu price = food cost divided by target percentage, so $4.50 ÷ 0.30 = $15.00.

Which of the following is considered a fixed cost in kitchen operations?

Answer: Rent for the restaurant space

Rent stays constant regardless of sales volume, making it a fixed cost.

A whole beef tenderloin costs $88 and yields 8 pounds of usable portions after trimming from an 11-pound purchase weight. What is the cost per usable pound?

Answer: $11.00

Cost per usable pound = total cost ÷ usable yield, so $88 ÷ 8 lb = $11.00.

What does a prime cost of 62% indicate for a restaurant?

Answer: Combined food and labor costs equal 62% of sales

Prime cost is the sum of cost of goods sold and total labor cost expressed as a percentage of sales.

A kitchen's actual food cost is 34% but the theoretical food cost is 29%. What is the most likely explanation for the variance?

Answer: Waste, over-portioning, or theft

A gap between actual and theoretical food cost typically points to shrinkage such as waste, over-portioning, spoilage, or theft.

Which inventory valuation method assumes the oldest stock is used first, matching standard kitchen rotation practice?

Answer: FIFO

FIFO (first-in, first-out) values inventory as if the oldest items are consumed first, mirroring proper stock rotation.