Food Cost Management & Pricing Flashcards

Which inventory control method assigns value to stock based on the average cost of all units available during the period?

Answer: Weighted average cost

The weighted average cost method divides the total cost of goods available for sale by the total number of units to determine per-unit cost.

A restaurant's break-even point is the level of sales at which:

Answer: Total revenue equals total costs with zero profit or loss

The break-even point is where total revenue exactly covers total costs, resulting in neither profit nor loss.

A menu item with a high contribution margin but low sales volume is classified in menu engineering as a:

Answer: Puzzle

In menu engineering, a Puzzle item has high profitability (contribution margin) but low popularity, suggesting it needs better promotion or repositioning.

Which purchasing practice involves buying large quantities of a product to take advantage of a lower unit price?

Answer: Volume purchasing

Volume purchasing leverages large order quantities to negotiate lower per-unit costs from suppliers.

If a restaurant has $5,000 in beginning inventory, purchases $20,000 in food, and ends with $4,500 in inventory, what is the cost of food used?

Answer: $20,500

Cost of food used = beginning inventory + purchases − ending inventory = $5,000 + $20,000 − $4,500 = $20,500.

Which costing approach charges only variable production costs to a product, excluding fixed overhead?

Answer: Variable (direct) costing

Variable costing (also called direct costing) assigns only variable costs to products, treating fixed overhead as a period cost.

A chef wants to limit free-pour cocktail ingredient overuse. Which tool provides the most effective portion control for liquid ingredients?

Answer: Jigger or measured pour spout

A jigger or measured pour spout ensures consistent, accurate liquid portions, directly controlling cocktail ingredient costs.