Principles of Food, Beverage, and Labor Cost Controls, Ninth Edition

Management observes bar operations Designated employee observes others working at the bar and reports back to management Individuals unknown to the bartender visit the bar, observe employees, and report back to management Closed-circuit television systems permit observation from some remote location

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2.

The Cost Approach Cost percent methods Monthly calculations Cost calculations by category Daily calculations The Liquid Measure Approach Ounce-control method

3.

The Sales Value Approach Actual sales record method Average sales value method Standard deviation method

+ = = =

Opening beverage inventory Beverage purchases this month Total available for sale this month Closing inventory this month Value of beverages issued to the bar
Bar inventory value at the beginning of the month Bar inventory value at the end of the month Bar inventory differential

+/ =

Value of beverages issued to the bar Inventory differential Cost of beverages consumed

Beverage cost percentage = Beverage cost Beverage sales

Added to beverage cost

Subtracted from beverage cost

Food to bar (directs) Storeroom issues Mixers Managers drinks Special promotions

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2. 3.

Determine bottle size and drink size. Calculate drinks per bottle. Multiply drinks per bottle by drink price to get sales value per bottle.

Example

Bottle size: 1 liter; drink size: 1 ounce 33.8 drinks per bottle 33.8 $3.00 = $101.40

1. 2.

Generally accepted turnover rates

Spirits1.5 Beers2.0

Average inventory = (Opening inventory + Closing inventory) 2 Turnover rate = Cost of beverages sold for a period Average inventory for the period

John Wiley & Sons, Inc. 2009