CHAPTER 3 - THE OPERATING BUDGET AS A CONTROL TOOLS


The operating budget, budget standards
Ò  A budget is simply a forecast or estimate of projected revenue, expenses and profit.
·         Number of meals daily, 3
·         Length of campers’ stay, 7 days
Ò  180 campers x 3 meals x 7days = 3780 meals
Ò  The foodservice director given amount to the meal served cost = RM1.85
Ò  So for 3780 meals, 3780 x RM1.85 = RM6993.00

Forecasting sales income
Ò  Sales is defined as revenue resulting from the  exchange of products and services for value.
Ò  TOTAL SALES = refers to total volume of sales expressed in dollar (ringgit) terms.

Monetary terms
1)      Sales price = amount charged each customer purchasing one unit of item
2)      Average sale = Total sale / Total number of covers (customer)
3)      Average sale per server = Total sale for Celina / Number of customers for Celina

Non-monetary terms
1)      Total number sold – total number of steaks , shrimp cocktails or any item sold.
2)      Cover – to describe one diner (quantity of food he or she consume)
3)      Total covers – total number of customers served in a given period (hour/ meal period/day/ week)
Covers per hour = Total covers / Number of hours operation
Covers per day = Total covers / Number of days of operation
Covers per server = Total covers / Number of servers
Seat turnover – number of seats occupied during a given period= Number of customers served / number of seats

Allocating costs and profit requirements
Ò  Each dollar of sales, then, may be divided imaginatively into two portions:
  1. That which must be used to cover variable costs associated with the item sold
  2. That which remains to cover fixed costs and to provide profit


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