Inventory Control & Cost Management Flashcards

In a restaurant, 'contribution margin' is defined as:

Answer: Menu selling price minus the food cost of that item

Contribution margin = Selling Price − Food Cost, representing what each item contributes toward covering overhead and profit.

Which menu engineering category describes items with HIGH popularity and HIGH contribution margin?

Answer: Stars

Stars are the most desirable menu items — they are both highly popular and generate strong contribution margins.

A restaurant uses 800 lbs of ground beef in a month. Beginning inventory was 150 lbs and ending inventory was 100 lbs. How many pounds were purchased?

Answer: 750 lbs

Purchases = Usage + Ending Inventory − Beginning Inventory = 800 + 100 − 150 = 750 lbs.

What is the primary purpose of a 'steward's sales' report in inventory control?

Answer: To track food transferred from the kitchen to employee meals or complimentary items

A steward's sales report records food used for employee meals, comps, and tastings so those costs are properly accounted for.

Which approach helps a restaurant reduce food cost without changing menu prices?

Answer: Standardizing recipes and enforcing consistent portion sizes

Standardized recipes with enforced portioning directly reduce over-usage and keep food costs predictable.

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

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

At break-even, total revenue exactly covers all costs (fixed + variable), resulting in neither profit nor loss.

When negotiating with food vendors, which purchasing strategy typically results in the lowest unit cost?

Answer: Volume purchasing with price commitment contracts

Volume purchasing agreements commit to larger quantities over time, giving vendors predictability in exchange for lower per-unit pricing.