Unlike cash, however, inventory values may decrease since food and beverage items are perishable and subject to spoilage and theft. Just like cash, food and beverage inventory is a company asset. While in storage, the inventoried items are not considered a cost until used or sold. Determining Actual Food Expensesįrom an accounting and financial standpoint, a restaurant inventory is the dollar value of the food and beverage items that are held in storage. The food & beverage cost of goods sold (usually referred to as Food & Beverage Cost in the industry) is expressed as both a dollar amount and a percentage of food & beverage revenues. Items are consumed but not always sold to guests (employee meals, complimentary meals served for promotion purposes, etc.).Items purchased in bulk are not entirely used during the accounting period (refer to the section on inventory).The amount may significantly differ from the total spent on food purchase since: The food & beverage cost of goods sold is the dollar amount spent on items actually used to provide the menu items sold to the guests. One of the key figures needed each month (or even more often) is the cost of goods sold. Food and beverage expenses combined are one of the largest expense categories for foodservice operations. In the end, the goal is typically to make a profit. The effective manager has to manage and control all the various operating expenses in a foodservice operation. Food & Beverage Cost of Goods Consumed (used).Identify acceptable and unacceptable variances in food cost.Explain the meaning of the operational efficiency ratio.Calculate an operational efficiency ratio.Explain how errors in inventory will affect the cost of food used or sold calculations.Calculate the food cost percentage – Cost of Food Sold / Food Sales or Cost of Food Portion/Menu Price.Describe and calculate the impact of free or reduced-cost employee meals and transfers on the cost of food sold calculations.

Determine the cost of food sold and the cost of food consumed (or used) and explain the difference between the two.

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