CONTROLLING FOODSERVICE COSTS CHATPERS 1 – 10 STUDY GUIDE CHAPTER 1 1. A restaurant budgeted for sales of $100,000 and total costs of 89%. How much profit would this restaurant earn?

a. $9,000 b. $10,500 c. $11,000 d. $10,000

2. The proportion or percentage of expense items to sales is known as

a. cost structure. b. total costs. c. fixed costs. d. controllable expenses.

3. A restaurant has $90,000 in sales, $31,000 in food costs, $34,000 in labor costs, and $24,000 in other costs. It has experienced a

a. loss of $1,000. b. loss of $3,000. c. profit of $2,000. d. profit of $1,000.

4. Controlling costs is something that a manager should consider

a. weekly. b. daily. c. only at budget time. d. monthly.

5. The three key numbers that managers must pay attention to when managing costs are

a. generated sales, total variable costs, and fixed costs. b. generated sales, costs incurred to produce these sales, and profits. c. generated sales, expenses, and taxes. d. generated sales, controllable costs, and noncontrollable costs.

6. Costs that remain the same regardless of sales volume are known as

a. variable costs. b. noncontrollable costs. c. fixed costs. d. semivariable costs.

7. A restaurant experiences a 3% increase in sales based on its budget. This restaurant should also expect to see a 3% rise in

a. variable costs. b. fixed costs. c. expenses. d. profits.

8. Labor is an example of a

a. fixed cost. b. controllable cost. c. variable cost.

d. semivariable cost.

9. Wages are an example of a

a. noncontrollable cost. b. controllable cost. c. variable cost. d. fixed cost.

10. An operation has signed a lease in which it will pay $4,000 per month plus 1% of sales. For this operation this lease represents a

a. fixed cost. b. controllable cost. c. variable cost. d. semivariable cost.

11. The only pure variable costs are

a. food, beverage, and profit. b. also controllable expenses. c. food and beverage costs. d. food, beverage, and labor.

12. The costs for an operation's food, beverage, and labor over a specific time period are known as its

a. prime costs. b. principal costs. c. key costs. d. main costs.

13. Food, beverage, and labor typically contribute to an operation's total controllable expenses by

a. 90% b. 75% c. 65% d. 50%

14. An operation has experienced total sales of $85,000, beverage costs of $16,230, food costs of $30,167, labor costs of $22,158, rent of $4,000, and insurance of $1,000. What is its prime cost as a percentage of total sales?

a. 19.3% b. 80.7% c. 86.6% d. 13.4%

15. The majority of what a particular restaurant serves is premade, requiring the staff to thaw, heat, and serve the items. A restaurant with this type of menu would expect to have

a. higher-than-average food costs and lower-than-average labor costs. b. higher-than-average food costs and average labor costs. c. lower-than-average food costs and lower-than-average labor costs. d. lower-than-average food costs and higher-than-average labor costs.

16. Measures established to making comparisons and judgments about the degree of excellence in operations are known as

a. standard controllable costs. b. prime costs. c. operational standards.

d. performance standards.

17. The first step in the cost control process is to

a. develop performance standards. b. monitor actual performance. c. address performance discrepancies. d. compare actual performance to performance standards.

18. Portion sizes for menu foods and beverages and employee production expectations are known as

a. quality standards. b. cost control standards. c. measurement standards. d. quantity standards.

19. Checking every item on the budget against actual figures is known as

a. an audit. b. a line item review. c. a variance. d. a specific review.

20. A restaurant experienced a labor cost variance of -15%. A manager looking at this should consider

a. lowering menu prices. b. reducing staff. c. whether service and quality levels were maintained. d. cross training employees in order to gain operational efficiencies.

CHAPTER 2

1. A plan that indicates an operation's financial objectives is known as a(n)

a. financial statement. b. balance sheet. c. budget. d. income statement.

2. Today, budgets are seen by managers as

a. an action plan. b. a burden to produce. c. a process with no application. d. something that must be strictly adhered to.

3. An integral part of the planning process where the manager makes future predictions regarding sales trends based on current situations is known as

a. budgeting. b. forecasting. c. the income statement. d. a cash flow statement.

4. A problem with budgets is that they

a. are quick and easy to prepare. b. make it impossible to compare actual results with targeted results. c. help managers to avoid surprises.

d. are based on forecasting, which can be very volatile and unreliable.

5. Last year a restaurant served 45,000 guests. It is forecasting its sales for the following year and believes that because of local economic conditions it will be experiencing a downturn of 8%. How many guests will the restaurant forecast that it will serve during the following year?

a. 41,400 b. 44,640 c. 42,400 d. 48,600

6. A restaurant is budgeting for $900,000 in total sales. It has a history of the guest check average being $21.00. How many guests will the restaurant need to serve in order to reach this sales goal?

a. 42,857 b. 42,860 c. 43,857 d. 42,858

7. A company has produced what it considers to be a "stretch" budget. This type of budget is thought to be

a. optimistic and sometimes aggressive. b. pessimistic and challenging. c. one that exaggerates the possibilities in order to look good to investors. d. one that will test the limits of the operation.

8. A long-term budget is

a. for a duration of a year or less. b. typically very accurate and specific. c. the plan for replacing high-cost equipment. d. part of an organization's strategic plan.

9. A restaurant purchases a new walk-in refrigeration unit. The expense for this item should be listed on the

a. operating budget. b. capital expenditure budget. c. 5-year revenue budget. d. annual budget.

10. A manager is preparing the budget and is aware of several external conditions that could impact the operation over the budget period. This manager should prepare a

a. fixed budget. b. scenario budget. c. short-term budget. d. flexible budget.

11. This financial statement reports an operation's sales, expenses, and profits or losses for a period of time, such as a month, a quarter, or a year.

a. Income Statement b. Balance Sheet c. Statement of Cash Flow d. Annual Budget

12. Most full-service restaurants try to keep prime costs under

a. 50%. b. 90%. c. 75%. d. 65%.

13. On an Income Statement the primary indicator of a manager's effectiveness in meeting operational and financial standards is known as

a. gross profit. b. controllable profit. c. noncontrollable profit. d. net income.

14. The first step in the budgeting process is to

a. evaluate results. b. gather figures. c. allocate resources. d. take corrective action, if necessary.

15. The best resource for determining what business might be like in the following year is

a. the local newspaper. b. external data. c. industry financial reports. d. historical data.

16. Managers estimate food costs by estimating expenses for a future period and dividing that amount by the amount of anticipated sales. This method of estimating food costs is known as the

a. percentage of sales method. b. cost of sales method. c. average cost method. d. simple markup method.

17. A bar has beverage sales of $20,000 and food sales of $60,000 for total sales of $80,000. The wine costs that month are $6,000, beer costs are $2,000, and spirits costs are $3,000. What is the beer cost percentage?

a. 2.5% b. 15% c. 3.3% d. 10%

18. Last year a restaurant spent 35% of its revenue on its cost of food. Its food sales forecast for the coming year is $987,673. What will be the restaurant's budget for the coming year for food cost?

a. $350,487.32 b. $347,567.87 c. $345,685.55 d. $356,823.54

19. One of the simplest ways to determine labor budget is to

a. select a dollar amount as the budget. b. use a target labor cost as a percentage of sales. c. calculate what labor costs were in the preceding period and adjust for inflation. d. determine a labor cost for each menu item and then multiply by sales.

20. The minimum amount that an operation must generate in sales to cover all costs is known as the

a. break-even point. b. point of no profit. c. equal point. d. sales equivalent point.

21. The formula for calculating variance is

a. budgeted data / actual results = variance. b. actual results / budgeted data = variance. c. budgeted data - actual results = variance. *d. actual results - budgeted data = variance.

CHAPTER 3

1. The cost of an item is added to food cost when it is

a. delivered. b. ordered. c. invoiced. d. used.

2. Three numbers are needed in order to calculate food cost. They are the value of

a. requisitions, transfers, and inventory. b. opening inventory, purchases, and ending inventory. c. register sales, purchases, and inventory. d. food accounts payable, restaurant receivables, and register sales.

3. Opening inventory is always equal to

a. closing inventory of the same period. b. the total of the chef's requisitions. c. purchases for the period. d. closing inventory of the previous period.

4. Throughout the month the chef has kept careful track of the items that were used for employee meals. This dollar amount should be

a. subtracted from food costs. b. added to food costs. c. reported to human resources as a payroll expense. d. noted but will not have an effect on food cost.

5. A restaurant has a contract to sell its used cooking oil to an organization that makes bio-diesel fuel. The money received for this oil should be

a. added to food costs. b. reported as income. c. subtracted from food costs. d. noted but will not have an effect on food cost.

6. A chef has requisitioned some wine from the bar. The value of this wine should be

a. transferred from food costs to beverage costs. b. transferred from beverage costs to food costs. c. used as a trade for when the bar needs lemons and/or limes.

d. noted but will not have an effect on either cost.

7. The reason that food costs are translated to percentages is

a. so that they can be compared. b. that it gives the manager something to do. c. so that they can be deducted as an expense. d. so that they can be reported properly on tax forms.

8. Something that will directly affect the food cost percentage would be

a. transfers to the bar. b. the item begins to sell more. c. transfers from the bar. d. a change in price of a key ingredient.

9. A restaurant would always prefer to sell an item

a. with a lower food cost percentage. b. with a higher contribution margin. c. with a lower contribution margin. d. with a higher food cost percentage.

10. An operation that shows a steady increase in sales but fluctuation in food cost percentage is probably showing

a. an economy of scale. b. a lack of employees following control measures. c. that the manager does not know how to calculate food cost percentage. d. high turnover in the kitchen.

11. The percentage of sales volume that each menu item contributes to total sales is known as the

a. contribution rate. b. transaction percentage. c. contribution margin. d. sales mix.

12. The first step in developing standardized recipes is to

a. consider preparation details. b. observe the menu item preparation process. c. evaluate the recipe. d. write a recipe draft.

13. The final step in developing a standardized recipe is to

a. consider recipe revisions. b. use the recipe for preparation. c. evaluate the recipe. d. implement and consistently use the recipe.

14. One reason that restaurants use standardized recipes is that they make it possible for

a. encouraging creative plate presentation. b. the restaurant staff to forego training. c. menu item cost to be calculated simply. d. inventory levels to remain high.

15. The quality requirements of the products that are purchased are described in the

a. standardized recipes. b. daily requisitions. c. daily invoices. d. product specifications.

16. Standardized recipes should be

a. readable from 18-20 inches in a standing position. b. posted on the wall above the prep stations. c. kept on file in the manager's or chef's office. d. printed on small, easy-to-handle cards.

17. The preferred format for standardized recipes in high-quantity operations is the

a. narrative recipe form. b. posted recipe form. c. block recipe form. d. standardized recipe form.

18. The recipe format that is difficult to read because it lists all of the ingredients at the top of the form with numbered procedural steps below is the

a. block recipe form. b. standardized recipe form. c. posted recipe form. d. narrative recipe form.

19. The tool used to calculate the exact amount that one serving or portion of a food item should cost when prepared according to the item's standardized recipe is known as a

a. standard portion cost card. b. recipe price card. c. standard recipe card. d. recipe cost card.

20. A chef is determining the portion size for a dish that features whole shrimp. To make the portioning of the shrimp consistent, the chef will specify

a. how many shrimp are in each portion. b. how much each portion should weigh. c. how many milliliters should be in the portion. d. how many cups of shrimp should be in the portion.

21. A recipe lists an ingredient as "3 pounds of mushrooms, diced." This form of listing an ingredient is known as the

a. edible portion method. b. instructional method. c. as-purchased method. d. specific method.

22. A recipe will specify an ingredient in the edible portion format because some recipe items

a. gain capacity in preparation. b. are in different sizes on the menu. c. are not edible. d. lose volume in preparation.

23. The sum total of product cost included in a single meal is known as the

a. plate cost. b. meal cost. c. platter cost. d. portion cost.

24. A restaurant serves an "all you can eat" buffet. At the beginning of serve, the value of the inventory is determined to be $1,200, and at the end of the meal period, it is $800. That meal period the restaurant served 275 customers. The average food cost per customer for that meal period would be

a. $7.27. b. $1.45. c. $5.82. d. $3.64.

CHAPTER 4

1. A pricing that is based on how many people want the product is known as

a. market-driven pricing. b. competition pricing. c. price-value pricing. d. demand-driven pricing.

2. A customer's opinion of a product's worth to him- or herself is known as

a. worth perception. b. value perception. c. value relationship. d. price perception.

3. When customers begin to decide to purchase a substitute, patronize the competition, or eat at home, it is an indication that menu prices at a restaurant have

a. become lower than the competition's prices. b. are within the acceptable price range. c. become too low to indicate value. d. moved outside the acceptable price range.

4. Pricing a soda by using a 15% food cost, and a tuna steak by using a 30% food cost are examples of

a. pricing differences. b. value perception. c. markup differentiation. d. internal factors.

5. When calculating costs the first thing the manager needs to know is

a. what the competition is charging for the same item. b. how many will be sold. c. how customers view the price-value relationship. d. the cost of one standard portion.

6. A manager has determined that a pan of lasagna costs $36 dollars to produce. The pan is to be cut into 20 equal-size servings. What is the cost per serving for the lasagna?

a. $2.00 b. $1.80

c. $1.90 d. $1.75

7. The difference between the actual cost of producing an item and the price listed on the menu is known as

a. mark-up. b. margin. c. factor. d. variance.

8. A restaurant uses a factor of 3 to determine its menu prices. What would be the selling price for an item with a cost of $4.00?

a. $8.00 b. $10.00 c. $9.00 d. $12.00

9. A restaurant uses the factor method for pricing its menu items and desires a food cost close to 25%. What factor would the restaurant use?

a. 3 b. 4 c. 4.5 d. 3.33

10. A restaurant uses the food cost percentage method for determining prices and wants the food cost to be 35%. What would be the food cost for an item listed on the menu at $14.50?

a. $41.43 b. $5.07 c. $43.50 d. $4.67

11. A restaurant has nonfood costs of $485,000 and desires a profit of $130,000. It has forecasted annual sales of 150,000 customers. An item on the menu costs $5.00. What will be the selling price for this item using the contribution margin method of pricing?

a. $4.10 b. $5.86 c. $8.23 d. $9.10

12. A restaurant uses the ratio method of pricing. It has annual nonfood costs of $675,000 and desires a profit of $125,000. Last year the restaurant spent $367,000 on food costs. What will be the selling price of an item with food cost of $6.00?

a. $13.08 b. $8.18 c. $11.03 d. $7.83

13. A restaurant with annual sales of $145,000 has labor costs of $45,000 and food costs of $42,000. Using the prime cost method, what would be the selling price of an item with a food cost of $6.00?

a. $13.00 b. $22.00 c. $16.00 d. $10.00

14. A restaurant assumes that an item has a popular menu mix percentage if sales are at least 70% of its percentage share within the menu mix. There are 9 different appetizers on this menu. What would be menu mix benchmark to determine popularity?

a. 9.9% b. 10.1% c. 11.1% d. 7.77%

15. Menu engineering identifies the

a. way customers feel about an operation's products. b. buying habits of customers and how their choices affect profitability. c. cost-effectiveness of menu pricing policies. d. successful items on the menu.

16. An item with high popularity and a low contribution margin is referred to as a

a. puzzle. b. dog c. star. d. plow horse.

17. A restaurant sells 25 servings of item A, 35 servings of item B, 40 servings of item C, and 28 servings of item D. What is the sales mix percentage for item D?

a. 11.8% b. 12.8% c. 12.3% d. 11.4%

18. The weighted average food cost percentage for all items sold, weighted by the quantity of each item sold, is known as the

a. actual food cost percentage. b. standard food cost percentage. c. calculated food cost percentage. d. composite food cost percentage.

19. A restaurant has not been as profitable as it would like to be. The manager has determined that the menu is the problem. One choice the manager has to correct this problem is to

a. raise prices. b. lower prices. c. put more high-cost items on the menu. d. make portion sizes larger.

20. A restaurant's standard cost percentage is 35%. Its composite cost percentage is also 35%, but its actual cost percentage is 42%. This indicates what type of problem?

a. Menu costing b. Operational c. Service d. Menu mix

CHAPTER 5

1. The first step in the buying process is to determine

a. what to buy. b. where to buy.

c. who should buy. d. when to buy.

2. Which of the following is an important skill that buyers need to possess?

a. Computer skills b. Culinary skills c. Management skills d. Sanitation skills

3. Companies that provide products for use in restaurant and foodservice operations are known as

a. sellers. b. vendors. c. retailers. d. merchants.

4. The description of a desired product by its name, its intended use, grade, size, and other characteristics is known as its

a. requirement. b. design. c. description. d. specification.

5. The best substitution for fresh raspberries used for making a pie might be

a. raspberry juice. b. individually quick frozen raspberries. c. frozen mixed berries, including raspberries. d. fresh blueberries.

6. RFP stands for

a. really fair prices. b. refrigerated fresh produce. c. rapid fire pricing. d. request for proposal.

7. Maintaining stock sufficient for an operation to have enough on hand to get the kitchen through until the next order is delivered is known as

a. parity. b. level of equality. c. the minimum inventory. d. the par level.

8. A restaurant uses 2 cases of tomato sauce a day, Monday through Friday; 3 cases on Saturday; and is closed on Sunday. The safety stock is 5 cases. What would be the level of par if deliveries are made once a week?

a. 22 b. 18 c. 23 d. 20

9. A restaurant had established a par level of 14 cases for canned tomatoes. The perpetual inventory shows 6 cases on hand. How many cases should be ordered?

a. 6

b. 14 c. 20 d. 8

10. A prime vendor supplies

a. the goods that go into prime cost. b. the simple farm-raised items. c. the primary goods such as meats, fish, and poultry. d. most of the operation's goods.

11. The level of service needs, the quality of specifications, and the relationship with the prime vendor are all part of defining the needs of

a. the organization. b. management. c. the customers. d. the executive committee.

12. A small restaurant makes a list of its most frequently used items. It shares this list with three vendors and asks them for quotes. This restaurant is seeking

a. viable quotes. b. informational quotes. c. reasonable quotes. d. competitive quotes.

13. A small ice cream stand receives the same order each week from its paper supplier. This is known as a

a. prime order. b. standing order. c. permanent order. d. competitive order.

14. A chain restaurant has an agreement with a poultry house and instructs the franchisees that they must purchase poultry from this particular vendor. In return for this large amount of business, the vendor agrees not to mark up the cost of the poultry more than 10%. This arrangement is called

a. standing order. b. exclusive vendor. c. cost-plus. d. prime vendor.

15. The criteria for selecting a vendor should always include

a. location and products. b. buying from someone other than your competitor. c. friendliness of the salesperson. d. quality, price, and service.

16. The recommended number of inventory turns per month is

a. 4 to 6 times. b. 1 to 3 times. c. 7 to 8 times. d. 3 to 5 times.

17. The form used as a tool for counting and tracking all of the products an operation uses is known as

a. an inventory tracking form. b. an order guide. c. a requisition. d. a bid sheet.

18. The document that serves as a bill as well as a receipt for items delivered is known as

a. a purchase order. b. a proof of purchase. c. an invoice. d. a statement.

19. The first document used in the purchasing cycle is the

a. purchase order. b. invoice approval form or stamp. c. invoice. d. purchase requisition.

20. The document that serves to verify that goods being received are the goods that were ordered is known as the

a. receiving report. b. purchase order. c. purchase requisition. d. invoice.

CHAPTER 6

1. A delivery arrives in the middle of the busy lunch service. The chef and the driver sign the invoice, and the invoice is placed in the invoice bin for payment. The chef does not think about the delivery until things begin to slow down, 2 hours later. What might go wrong in this scenario?

a. The order could be complete. b. An item could have been shorted, but with an acceptable substitute. c. Proper signatures are not on the invoice. d. Frozen products could begin to thaw.

2. Vendor delivery hours should be

a. inconsistent. b. at the discretion of the vendor. c. flexible. d. negotiated and established.

3. The government code that explains what to do if a shipment of goods "fails in any respect to confirm" what the buyer agreed to purchase is known as the

a. FDA. b. HOSA. c. EOC. d. UCC.

4. The invoice and purchase order are compared because

a. weights on the invoice must be compared to actual weights of the items delivered. b. this is the only way to know if unauthorized items were added to the order or ordered items omitted. c. items delivered by count must be weighted.

d. the receiver needs to know where the items are to be delivered.

5. The form used to adjust information about product quantities or costs recorded on a delivery invoice is known as the

a. invoice adjustment memo. b. credit memo. c. correction form. d. debit memo.

6. Once received, what is the first category of goods to be put away properly?

a. Frozen food b. Dairy c. Dry goods d. Produce

7. In order to check the temperature on ROP bulk food, the receiving clerk should insert the thermometer stem or probe

a. into the center of one of the packages. b. away from any bone. c. between two packages. d. into the product itself.

8. ROP describes a product contained in a package

a. in which oxygen has been removed or replaced. b. that packs the product in ice. c. in which preservatives have been injected. d. in which oxygen has been added as a preservative.

9. To determine short weight, a receiving clerk would

a. add the actual weight of an item to the weight given on its label. b. compare the actual weight to the weight on the label and then consider whether the difference is significant before taking action. c. subtract the actual weight of an item from the weight given on its label. d. reweigh all products.

10. When frozen seafood is thawed in an effort to make it appear fresh, it is referred to as

a. partially thawed seafood. b. softened seafood. c. slacked-out seafood. d. defrosted seafood.

11. A well-trained receiver

a. should be familiar and friendly with all sales and delivery personnel. b. does not need to be familiar with safety and sanitation guidelines. c. does not need to be able to determine proper storage for all items. d. should be knowledgeable of and familiar with appropriate technology.

12. The National Restaurant Association estimates that the typical independent establishment loses up to what percent each year to fraud and theft?

a. 4-5% b. 1-3% c. 7-8%

d. 10-12%

13. One way to control access to storage areas is to

a. give trusted personnel access to the storage areas for which they are responsible. b. allow only the manager to have access to locked storage areas. c. give trusted personnel access to all locked storage areas. d. allow only the chef to have access to locked storage areas.

14. At the beginning of the day the running inventory showed that there were 12 lobster tails in storage. During the day, 7 orders of lobster tail were filled and a case containing 8 lobster tails was delivered. How many lobster tails should actually be in inventory at the end of the day?

a. 11 b. 12 c. 14 d. 13

15. Rule number one to protect an organization from external security threats is:

a. do not allow personnel to leave during their shift. b. have an alarm that sounds each time the back door is opened. c. position a camera on the back door to show who goes in and out. d. keep the back door locked.

16. A receiving clerk is putting canned goods on a shelf by placing those just received in front of the existing inventory. This type of action indicates that

a. FIFO will likely be followed. b. FIFO will likely not be followed. c. LIFO is the way in which the inventory is accounted for. d. LIFO will likely not be followed.

17. The process of restaurant personnel actually going into the storage areas and counting and valuing all the items on hand is known as

a. running inventory. b. physical inventory. c. counted inventory. d. perpetual inventory.

18. An estimate of cost based on requisitions, transfers, and sales is known as the

a. weekly food cost. b. receiving report. c. daily food cost. d. requisition totals.

19. The basic formula for calculating inventory values is

a. (opening inventory - purchases) - closing inventory = cost of goods sold. b. (opening inventory + purchases) - closing inventory = cost of goods sold. c. (opening inventory - transfers) - closing inventory = cost of goods sold. d. (opening inventory + transfers) - closing inventory = cost of goods sold.

20. At the beginning of May a restaurant has 5 boxes of 18? film valued at $21.00 per box. During the month it receives the following amounts at the listed prices

May 5 4 boxes $20/box May 12 5 boxes $22/box May 19 4 boxes $21/box May 26 5 boxes $20/box At the end of the month, there are 6 boxes left in inventory. Using the FIFO method for valuing inventory, what is the value of the inventory?

a. $120 b. $130 c. $122 d. $121

21. At the beginning of May a restaurant has 5 boxes of 18? film valued at $21.00 per box. During the month it receives the following amounts at the listed prices. May 5 4 boxes $20/box May 12 5 boxes $22/box May 19 4 boxes $21/box May 26 5 boxes $20/box At the end of the month, there are 6 boxes left in inventory. Using the Averaged Price Method for valuing inventory, what is the value of the inventory?

a. $124.00 b. $124.50 c. $126.00 d. $124.68

22. A restaurant has a beginning inventory of $9,575 and an ending inventory of $11,550. It has determined that the cost of food sold for the month was $47,531.25. How many times did the inventory turn?

a. 4 b. 5.5 c. 5 d. 4.5

23. Taking the food or beverage items from storage is known as

a. issuing. b. requisitioning. c. dealing out. d. distributing.

24. Food charged to food cost on the day that it is received is referred to as a(n)

a. stores. b. inventory. c. indirect. d. direct.

CHAPTER 7

1. When forecasting sales for the next period it is important to focus on

a. staffing and seating availability. b. the number of covers and the menu mix. c. staffing and the menu mix. d. the number of covers and inventory levels.

2. The total customer count multiplied by the average check per person is known as the

a. conversion factor. b. sales prediction. c. transaction analysis. d. sales forecast.

3. A restaurant has calculated that the average check per entrée is $17.50. 20% of the guests order an appetizer and the average appetizer price is $6.50. What will be the average check considering the entrée and the appetizer?

a. $24.00 b. $18.80 c. $26.50 d. $19.80

4. A hotel lounge sells wine by the glass for $6.00, and it has calculated that 25% of the customers order, on average, two glasses. What will wine sales contribute to the average beverage check?

a. $12.00 b. $6.00 c. $4.00 d. $3.00

5. The percentage share of a given menu item in its respective category, such as entrée or desserts, is known as the

a. sales index. b. popularity indicator. c. sales indicator. d. popularity index.

6. From the sales history a manager knows that Entrée A typically accounts for 15% of the sales, Entrée B for 35%, Entrée C for 20%, and Entrée D for 30%. Based on a sales forecast of 200, how many servings of Entrée C should be prepared?

a. 20 b. 60 c. 40 d. 30

7. The chart that informs staff exactly what and how much to prepare is known as the

a. food inventory chart. b. food production chart. c. popularity chart. d. fabrication chart.

8. A chef will be producing an entrée for a catered event for 200 guests. The standard recipe for this entrée serves 50. What will be the conversion factor that the chef will use?

a. 5 b. 200 c. 4 d. 50

9. A chef will be producing an entrée for a catered event and has determined that the conversion factor needed to produce the proper quantity is .75. The recipe calls for 4 pounds of ground beef. How many pounds of ground beef will the chef use to prepare this entrée?

a. 4.75 b. 4 c. 5.33 d. 3

10. A system that encompasses tasting tests and checking standards is known as a

a. standards check. b. quantity-control check. c. quality-control line check. d. line inspection.

11. In the process of conducting a taste test, a restaurant manager realizes that the cook added salt to the recipe instead of sugar. What corrective action should this manager take to prevent a recurrence of this mistake?

a. Arrange the ingredient bins in alphabetical order. b. Put ingredients in bins that have windows so cooks can see what they are about to use. c. Color code the bins. d. Make sure that all ingredient bins are clearly marked.

12. A restaurant manager notices that on the nights that the head chef works the customers comment on how delicious the meatloaf is. On the nights that the sous chef is in charge, a similar number of customers complain about the quality of the meatloaf. The manager should check

a. that the portion sizes are being followed. b. to be sure that both the chef and the sous chef are following the standard recipe. c. that the servers are picking up their orders and serving the meatloaf promptly. d. that the meat is always fresh.

13. A restaurant manager is concerned because desserts are not selling. One of the first things the manager should do is

a. analyze the list of desserts. b. increase the portion size of the desserts. c. lower the prices on the desserts. d. speak with the servers to see what they say about the situation.

14. How much would a practice that resulted in $5.00 of waste a day cost a restaurant in a year's time if it is open 350 days during the year?

a. $1,350.00 b. $1,750.00 c. $1,900.00 d. $1,500.00

15. Foods that are meant to be served hot should be held at a minimum temperature of

a. 165°F (74°C). b. 135°F (57°C). c. 100°F (38°C). d. 212°F (100°C).

16. A restaurant adds quiche to its lunch menu as a way of using left-over beaten eggs and cooked bacon from the breakfast shift. This practice is known as

a. carry-over production. b. creative waste management. c. cross contamination. d. left-over production.

17. The manager of a bar is disappointed in the bar's profitability and wants to track the actual liquor use and cost for a period. This period should last

a. one week to a month. b. one shift. c. at least a month. d. no longer than one week.

18. When compared to the processes used to monitor food production, the processes used by a bar to monitor beverage production are

a. completely different. b. determined by different monitoring organizations. c. the same. d. different because of the costs involved.

19. A bartender over pours liquor, pouring 2 ounces per drink rather than the standard of 1.5 ounces per drink. By what percent is the bartender over pouring?

a. 25% b. 50% c. 33% d. 20%

20. The process of auditing the bar's physical inventory should be done by

a. the bartender. b. the operation's vendors. c. some of the servers. d. management.

CHAPTER 8

1. The amount of food in a serving as determined by the standardized recipe or the company standard is known as

a. product segmentation. b. gross weight. c. serving control. d. portion control.

2. If portion sizes are not consistent and the amount served is less than the amount listed on the menu, then

a. food costs will increase. b. the operation will lose money. c. customers may be unhappy and not return. d. customers will be happy that no food is wasted on their plates.

3. The portion of the plate that will have the largest effect on food cost is the

a. vegetable. b. bread. c. starch. d. protein.

4. A restaurant has specified that the standard portion of beef in a recipe is to be 4 ounces. The edible portion price of this beef is $12.00 per pound. The chef consistently cuts the beef into portions that weigh 4.5 ounces. On average, 250 customers each week order this dish. In a year's time, how much money will be lost due to this over-portioning?

a. $9,750.00 b. $12,000.00 c. $3,000.00 d. $4,875.00

5. A manager of a high-volume cafeteria is concerned that food costs may be adversely effected because of portion control. The cafeteria's most popular item is a meat and two vegetables served on one plate. How can the manager ensure that standardized portions are being given without slowing down the production of the fast moving line?

a. Require the use of a portion scale for each serving b. Require the use of a sectioned plate and scoops for portion control c. Encourage the staff to develop a "feel" for the proper serving size for each item d. Have the servers count the slices of meat and the number of green beans that go on each plate

6. A food that is measured or weighed before it goes to the service line is known as a

a. fractional serving. b. portion-controlled item. c. standard serving. d. preportioned item.

7. Items that are premade products that are nearly complete but lack finishing touches such as sauces and flavoring are known as

a. speed scratch items. b. preportioned items. c. ready-set-serve items. d. prepared servings.

8. A collection of documents that serve to communicate the operation's policies, work rules, and expectations is known as the

a. service manual. b. employee training guide. c. employment contract. d. employee manual.

9. These convey the expectations for every position in the operation.

a. Work assignments b. Written job descriptions c. Written job specifications d. Station diagrams

10. Once an employee goes through a training program, that training

a. should be completed for that employee. b. should be ongoing and reinforced daily. c. has served its purpose. d. cost is calculated.

11. A technique for controlling the operation's cash generation, product usage, and inventory is known as

a. a point-of-sale machine. b. a procedural guide. c. an operational guide. d. a point-of-sale system.

12. The type of selling known to be one of the easiest, most cost-effective ways to increase revenue, profit, and customer satisfaction is known as

a. personal selling. b. suggestive selling. c. down-selling. d. bait-and-switch selling.

13. The document that is most often used for high-cost items and details the number of items issued to the cook's line, the number returned to inventory, and the number sold to customers is known as the

a. product usage report. b. high-cost item report. c. item creation report. d. waste report.

14. The two most widely used methods in the restaurant and foodservice industry for recording items that guests purchase are the

a. precheck and postcheck systems. b. duplicate guest check and point-of-sale systems. c. precheck and duplicate guest check systems. d. POS-initiated guest check and point-of-sale systems.

15. The system in which a guest's order is written on a piece of paper that is automatically copied to a second piece of paper is known as the

a. precheck system. b. POS-initiated guest check system. c. duplicate check system. d. postcheck system.

16. A guest who leaves an operation before paying for a meal is considered a

a. skip. b. check. c. leave out. d. bounce.

17. Credit and debit cards sometimes are not honored at a restaurant because they

a. guarantee payment. b. involve a cost to the operation. c. could be stolen. d. charge the customer interest, thereby increasing the cost of the meal.

18. The form that shows sales, cash, and charges collected as well as any money over or short for each shift is known as the

a. daily sales report. b. POS report. c. POS-initiated guest check report. d. cash report.

19. In preparing a daily sales report, a manager uses the

a. cash report and register readings. b. guest check report and register readings. c. cash flow report and register readings. d. income statement and balance sheet.

20. As a security measure, every operation should follow the rule that

a. the same person who has access to accounting records should handle cash. b. the same person who has access to accounting records should not handle cash. c. servers should handle credit card transactions, while the manager should handle the cash. d. the manager should handle all accounting records and cash.

CHAPTER 9

1. Payroll costs for manager salaries are considered

a. controllable costs. b. fixed costs. c. semivariable costs. d. variable costs.

2. The "skeleton crew" is the

a. minimum number of employees needed to open the doors. b. maximum number of employees needed to open the doors. c. group of supervisors for the operation. d. people that work at night.

3. Labor cost is expressed on the income statement as

a. the cost of hourly employee wages. b. the total of employees' salaries. c. all-inclusive and includes the employer's contribution to FICA and Medicare, worker's compensation insurance, and employee benefits as well as wages. d. the same as payroll costs.

4. Paid holidays, health insurance, and company-paid retirement plans are all considered part of

a. wage costs. b. salaries. c. fringe benefits. d. employee wages.

5. A restaurant has calculated that its benefits cost is 20% of the base pay. At this restaurant, an employee who earns an hourly wage of $10 would have an actual labor cost of

a. $12.00 b. $12.50 c. $7.50 d. $8.00

6. A restaurant has labor costs of $6,290 and total sales of $18,500. What is its labor cost percentage?

a. 32% b. 35% c. 33% d. 34%

7. A restaurant is open 22 days each month. Its monthly fixed payroll cost is $30,800, and its daily variable payroll cost is $2,000. What is the restaurant's total daily payroll cost?

a. $3,800 b. $3,400 c. $4,200

d. $2,000

8. A level set by managers to measure the amount of work performed by an employee is known as a

a. productivity standard. b. quality standard. c. quantity standard. d. labor standard.

9. A restaurant had sales of $3,600 the previous Saturday during dinner, and 9 people each worked 4 hours. What are its sales per labor hour?

a. $400 b. $600 c. $1,000 d. $900

10. A restaurant served 3,000 people during the past week. Its labor hours for the week totaled 1,250. How many covers per hour did the restaurant serve?

a. 2.5 b. 2.4 c. 2.7 d. 3

11. A restaurant spent $11,562 on total labor for the past week and served 2,896 guests. What was the restaurant's labor cost per cover?

a. $4.89 b. $3.99 c. $4.23 d. $3.79

12. The first step in controlling labor costs is to

a. calculate what labor cost should be. b. evaluate actual labor costs. c. plan the number of labor hours to be used in each area. d. forecast the number of covers or revenues for each scheduled meal period.

13. A restaurant has a highly specialized menu with complicated standardized recipes requiring locally grown ingredients. When compared to average labor costs, this restaurant's labor costs are most likely

a. lower. b. similar. c. higher. d. dissimilar.

14. The number that represents the number of employee work hours necessary in each job category to perform a given volume of forecasted production is known as

a. standard labor hours. b. regular labor hours. c. average work hours. d. standard man-hours.

15. The three main considerations when developing a work schedule are

a. labor cost, level of service, and employee availability. b. employment records, customer expectations, and employee morale. c. labor cost, customer expectations, and employee availability. d. labor cost, level of service, and employee morale.

16. A restaurant has set its standard labor cost percentage at 31%, and it projects sales to be $3,482 for the upcoming Saturday night. What are the total available labor dollars for this restaurant?

a. $11,232.25 b. $1,079.42 c. $1,044.60 d. $1,234.25

17. A template, usually a spreadsheet, showing the number of people needed in each position to run the restaurant or foodservice operation is known as a

a. schedule of labor hours. b. work schedule. c. master plan. d. master schedule.

18. A restaurant has forecasted that it will serve 260 people during the dinner shift on Thursday. The restaurant is open for dinner for 5 hours and has set a standard of 13 covers per server. How many servers should the restaurant schedule for this shift?

a. 4.0 b. 5.2 c. 3.6 d. 2.0

19. A restaurant has budgeted a total weekly payroll of $5,000, and its share of FICA/Medicare/unemployment is $650. Benefits are budgeted at $550, and forecasted sales for the coming week are $15,250. What is the restaurant's forecasted labor cost percentage?

a. 30.3% b. 37.4% c. 40.6% d. 32.7%

20. A restaurant employee earns $10 per hour and routinely clocks in 15 minutes before the scheduled time. If during the year the employee works a total of 250 days, how much will this practice cost the restaurant in additional employee wages?

a. $375 b. $2,500 c. $1,250 d. $625

21. To track the amount of time employees work, a restaurant requires the employees to sign in and out when their shifts begin and end. To record their time worked, these employees are using

a. a time sheet. b. a timecard. c. a manual time sheet. d. an electronic time record.

22. A restaurant needs 25 people in order to operate efficiently. Last year the restaurant hired a total of 10 people. Its turnover rate percentage is

a. 4% b. 25%

c. 40% d. 2.5%

CHAPTER 10

1. An intentional deception to cause a person to give up property or some lawful right is referred to as a

a. fraud. b. deception. c. swindle. d. scheme.

2. Security systems and tight controls help keep some people honest by

a. catching all attempts of theft. b. preventing all theft. c. having employees reveal a dishonest employee's intentions. d. making them think they might get caught.

3. The revenue collection system consists of three parts:

a. charging the guest, processing the payment, protecting the operation's cash assets. b. charging the guest, collecting revenue, protecting the operation's cash assets. c. generating a sale, processing the payment, depositing the money. d. generating a sale, collecting the cash, entering the sale in the POS system.

4. A server waits on a group of 8 people. When the check is presented, the server has purposefully put a higher total than actual. This server is guilty of

a. undercharging the guest. b. overcharging the guest. c. charging the guest the proper amount. d. adding a service charge.

5. A server notices the guests at one of his tables making their way toward the door. The server should

a. summon the manager because the guests are obviously trying to skip. b. politely explain to the guests that if they carry through with skipping on the bill, the server will be liable for paying for the meal. c. do nothing and hope that the guests stop by the hostess stand and offer to pay. d. approach the guests and politely offer to give them the check.

6. A watermark on a piece of currency

a. indicates that the bill is counterfeit. b. is visible to the naked eye. c. will show up under an ultraviolet light. d. will disappear when the bill is dry.

7. The three-digit code on the back of a credit card is known as the

a. card verification value. b. card verification value. c. credit verification value. d. credit validation value.

8. When two or more employees work together for dishonest purposes, it is referred to as

a. collusion.

b. complicity. c. connivance. d. consent.

9. Restaurants and foodservice establishments account for what percent of all credit card fraud cases in the United States?

a. 70% b. 50% c. 40% d. 25%

10. The number-one rule in controlling cash is to be sure that

a. at least two people have access to the cash drawer at all times. b. every transaction is rung up by the server. c. the manager is not allowed to count the receipts at the end of the evening. d. the person receiving the cash is not permitted to take a register reading.

11. No matter the size of an operation, a revenue security system must make sure that

a. product sales, guest charges, payments, and deposits are all the same amount. b. all sales are entered into the accounts receivable system. c. payments are subtracted from product sales before the deposit is made. d. product sales plus guest charges equals the amount deposited.

12. The first step in the four-step revenue security system is to verify

a. guest charges. b. all deposits. c. product sales. d. all payments.

13. To verify product sales, managers match

a. guest checks with actual guest charges. b. kitchen issues with guest checks. c. receipt totals with deposits. d. guest charges with total receipts.

14. A merchant account

a. allows credit card payments to be deposited. b. is the name for a business's account at the local bank. c. must be established before a restaurant can open for business. d. is a checking account for businesses that is different from a personal checking account.

15. Having a bonded employee means that the employee

a. will not steal from the operation. b. has not stolen from a previous employer. c. has posted an amount of money as a security deposit. d. has passed a security clearance.

16. Sound accounts payable practices can minimize

a. the amount of money owed to a restaurant by customers. b. discounts for early payments. c. late-payment costs.

d. cash flow.

17. The amount of money that an operation owes suppliers from which it has purchased goods, products, or services is known as

a. accounts receivable. b. acceptable limited debt. c. financial credit. d. accounts payable.

18. To verify an amount due, a purchasing agent matches the

a. purchase order with the purchase invoice. b. accounts payable amount with the accounts receivable amount. c. purchase order with the daily requisitions. d. purchase invoice with the credit memo.

19. Once an invoice is approved for payment, it goes to

a. accounts payable. b. the accounting system for payment processing. c. invoices payable. d. accounts receivable.