CRP Inventory Control & Cost Management 3 — Questions and Answers
Question 1: Which cost control tool shows the ideal food cost based on standardized recipes compared to actual food cost?
- Profit and loss statement
- Theoretical vs. actual food cost report (Correct answer)
- Daily sales summary
- Break-even analysis
Correct answer: Theoretical vs. actual food cost report
A theoretical vs. actual food cost report identifies gaps caused by waste, theft, or portion inconsistency.
Question 2: When a restaurant's actual food cost is higher than its theoretical food cost, the most likely cause is:
- Menu prices are too low
- Over-portioning, waste, or theft (Correct answer)
- The prime vendor contract expired
- Sales volume is too high
Correct answer: Over-portioning, waste, or theft
A gap above theoretical cost typically signals over-portioning, spoilage, or product going missing.
Question 3: What is the purpose of conducting a mid-month inventory count?
- To calculate end-of-month profit margins
- To identify cost problems early enough to correct them before period end (Correct answer)
- To satisfy health department requirements
- To update the vendor order guide
Correct answer: To identify cost problems early enough to correct them before period end
A mid-period inventory allows managers to spot excessive usage or shrinkage and adjust operations proactively.
Question 4: A restaurant's beverage cost percentage is 22%. If beverage sales are $18,000, what is the beverage cost in dollars?
- $3,600
- $3,960 (Correct answer)
- $4,320
- $2,700
Correct answer: $3,960
Beverage cost = 22% × $18,000 = $3,960.
Question 5: Which receiving practice helps ensure invoiced prices match purchase order prices?
- Blind receiving
- Three-way match (Correct answer)
- Spot-check receiving
- Credit memo reconciliation
Correct answer: Three-way match
A three-way match compares the purchase order, the receiving report, and the supplier invoice to confirm accuracy.
Question 6: In restaurant cost accounting, 'prime cost' refers to the combined total of:
- Food cost and beverage cost
- Labor cost and overhead cost
- Food cost and total labor cost (Correct answer)
- Rent and utilities
Correct answer: Food cost and total labor cost
Prime cost = Cost of Goods Sold (food + beverage) + Total Labor Cost, typically the largest controllable expense block.
Question 7: A perpetual inventory system differs from a periodic system in that it:
- Counts inventory only at the end of each month
- Updates inventory records continuously with each purchase and usage transaction (Correct answer)
- Relies solely on physical counts to determine cost of goods sold
- Is used only for alcoholic beverages
Correct answer: Updates inventory records continuously with each purchase and usage transaction
A perpetual system tracks every transaction in real time, providing a running balance of inventory on hand.
CRP Inventory Control & Cost Management 3
Which cost control tool shows the ideal food cost based on standardized recipes compared to actual food cost?