A stockout can occur as a result of

Part 1: Multiple Choice Questions (50 Credits)

1. A restaurant manager notes that actual labor costs exceed the expected labor costs for the volume of business during the week. The manager calls a management meeting to discuss the situation and, if necessary, take corrective action to prevent excessive labor costs for upcoming weeks. Which of the following management functions best describes the kind of work that the management team will be performing?

a. planning

b. staffing

c. controlling

d. organizing

2. Effective control systems can help food and beverage managers:

a. identify mistakes and plan tactics to correct them.

b. create a mission statement.

c. identify new menu items to offer.

d. define strategic objectives.

3. Which of the following statements about the role of standards in the control process is TRUE?

a. Industry averages are the best source of information for establishing standards.

b. Financial standards should always be set on the basis of past financial statements.

c. Standards can be established for revenue goals and sales targets as well as for employee attendance and safety records.

d. Standards are effective only if they state an expected level of performance for individual employees.

4. Robert, the newly hired manager at the independently owned Seasons Restaurant, has discovered that calculations of actual food costs include the cost of providing employee meals. However, employee meals are not included as costs in establishing the restaurant’s standard food costs. Which of the following principles of developing an effective control process has been violated?

a. Information about actual operating results must be simple and easy to collect.

b. Actual information must be collected in a manner consistent with the procedures and formats used to establish performance standards.

c. Checks on the controls should be part of the control system itself.

d. Actual information generated for control purposes should be compatible with the formats used in accounting systems.

5. A shopper service is a(n):

a. service offered by many businesses to assist guests who are unable to visit the operation in person.

b. Internet-based buying service that offers managers greater control of the purchasing and receiving function.

c. system of supply in which vendors automatically resupply the restaurant on a schedule

determined by the food and beverage manager.

d. control tactic that involves observing and reporting the actual operations of a business.

6. The cost effectiveness of a control system is measured by:

a. comparing the cost of implementing the control system with the cost reductions achieved by using the system.

b. evaluating how well the control system helps identify what corrective action is necessary to bring actual operating results closer to established standards of performance.

c. assessing the timeliness by which control information is made available to managers.

d. determining if the control system gives priority to factors that are most relevant to attaining the operation’s goals.

7. Service has been slow at the Season’s Restaurant. The manager has traced the problem to the flow of products from the storeroom to production areas. Which of the following control points is likely to be the focus of corrective action?

a. preparing

b. serving

c. issuing

d. storing

e. purchasing

8. A formula for producing a food and beverage item is called a(n):

a. product specification.

b. portion control percentage.

c. algorithm.

d. standard recipe.

9. Which of the following control tools links a restaurant’s suppliers and receiving staff, ensuring that the proper quality of products is available for food production and service?

a. yield percentage worksheets

b. standard purchase specifications

c. standard recipes

d. standard portion size specifications

10. If the original yield for a standard recipe is 25 portions and the desired yield is 125 portions, what is the adjustment factor?

a. 5.2

b. 5.0

c. 2.5

d. 1.2

11. To produce a desired yield of 20 pounds from a standard recipe with a standard yield of 5 pounds, the amount of each recipe ingredient used should be multiplied by:

a. 5.0.

b. 4.0.

c. 0.4.

d. 0.25

e. The information is not enough

12. Which of the following budgeting processes ensures that plans are specifically geared to individual operations within multi-unit food service companies?

a. reforecasting

b. bottom-up budgeting

c. top-down budgeting

d. mark-up budgeting

13. Which of the following is most likely to be classified as a variable cost?

a. general manager’s salary

b. rent expense

c. property taxes

d. food costs

14. At the 120-seat Riverside Restaurant, total variable costs for September were $12,000. For October, the manager expects to sell 10 percent more meals than in September. If the increase in sales volume occurs, the manager should expect the total fixed costs for October to be:

a. lower than in September.

b. higher than in September.

c. relatively the same as in September.

d. impossible to forecast with any accuracy.

15. At the Virtual Cafe, the average price per meal sold is $15 with an average variable cost of $7. Fixed costs for July are expected to be $30,000. If the restaurant manager expects to sell 5,000 meals in July, the net income (or loss) for the month would be:

a. $25,000 net income.

b. $10,000 net income.

c. $0 (breakeven).

d. $10,000 net loss.

e. The information isn’t enough

16. Which of the following is an example of an internal factor influencing decisions to change a menu?

a. consumer demand

b. menu mix

c. supply levels

d. competition

17. A chicken dinner has a standard food cost of $3.50. If a 30-percent food cost is desired, what would be the base selling price using the ingredients mark-up method?

a. $11.67

b. $12.60

c. $14.76

d. cannot be determined

According to the information in the following table answer the questions from 18 to 20.

RU Prime-rib burger

10 Servings

Purchase

Cost/Purchase

Ingredient

Amount Needed

Unit

Unit

ground prime rib

3

lb.

10-lb box

$60.00

crispy fried onions

1

cup

1 gallon

$32.00

Worcestershire sauce

3

cup

1 gallon*

$16.00

pre-sliced mushrooms

1

#10 can

6 #10/case

$18.00

hamburger buns

10

a dozen

$6.00

spreadable cheddar cheese

1

lb.

5 lb.

$15.00

*1 gallon = 16 cups

18. The standard portion cost of the ground prime rib is:

a. $5.40

b. $1.80

c. $2.00

d. $6.00

19. The standard portion cost of each prime-rib burger is

a. $3.40

b. $14.70

c. $3.50

d. $3.20

20. If the budgeted food cost is 35%, according to the ingredients markup pricing method, the base selling price for this menu item should be:

a. $5.14

b. $10.00

c. $9.14

d. $9.71

e. cannot be determined

21. After analyzing menu items, the management team at the Sports Bar & Grill decided that they could increase the prices of several menu items, sell fewer of them, but increase overall revenues. The demand for these menu items would best be characterized as:

a. inelastic.

b. high.

c. elastic.

d. low.

22. The corporate management team of a theme restaurant chain recently evaluated the chain’s menu items and identified several puzzles. Which of the following would be reasonable strategies for the management team to adopt in relation to these items?

a. Decrease prices.

b. Place the items in more visible locations on the menu.

c. Shift demand to these items by using suggestive selling techniques.

d. All of the above are reasonable strategies.

e. None of the above are reasonable strategies.

23. Menu engineering classifies menu items that are low in popularity and low in contribution margin as:

a. puzzles.

b. plowhorses.

c. stars.

d. dogs.

24. The Night Owl Restaurant expects to sell 6,000 meals during the upcoming month with an average variable cost per meal sold of $6. Total fixed costs are expected to be $24,000. The average selling price per meal sold at the breakeven point would be:

a. $4.

b. $6.

c. $8.

d. $10.

25. The Daylight Diner expects to sell 6,000 meals during the upcoming month with an average variable cost per meal sold of $6. If total fixed costs are expected to be $24,000, what would the average selling price per meal sold be if the operation is to meet its $12,000 profit goal for the month?

a. $6

b. $8

c. $10

d. $12

26. In relation to the food service purchasing cycle, which of the following positions is generally responsible for completing an issue requisition when items are needed in food production areas?

a. chef

b. purchasing agent

c. receiving agent

d. storeroom clerk

27. Which of the following terms describes a series of records, documents, or reports that trace the flow of resources through an operation?

a. purchase specification

b. audit trail

c. delivery invoice

d. inventory checklist

28. In relation to the purchasing function, the term quality refers to:

a. highest price.

b. popularity of a menu item.

c. suitability for intended use.

d. greatest value.

29. A stockout can occur as a result of:

a. employing a perpetual inventory system.

b. over-purchasing.

c. inadequate menu engineering.

d. under-purchasing.

30. With the minimum/maximum ordering system, the quantity of the order point of an item in storage is determined by the:

a. usage rate plus the minimum level.

b. usage rate plus the lead-time quantity.

c. lead-time quantity plus the safety level.

d. lead-time quantity minus the safety level.

According to the information in the table below, minimum/maximum ordering system is used in determining the quantity of the purchase order, answer the questions from 30 to 32:

Purchase unit

10-lb poly bag (frozen chicken)

Usage rate

100 lb per day

Order period

5 days

Lead time

1 day

Safety level

100 lb

31. The order point quantity of this item should be at:

a. 100lb

b. 200lb

c. 300lb

d. 400lb

32. The purchase units (bag) should be ordered at the order point are:

a. 50

b. 20

c. 30

d. 40

33. The number of pounds at the maximum inventory level would be:

a. 500lb

b. 600lb

c. 300lb

d. 200lb

34. Which of the following best characterizes the purchasing function of franchisees of a multi-unit food and beverage company?

a. Franchisees may purchase products such as fresh produce and bakery items locally, but must buy all other items from the franchisor company.

b. Franchisees are required to purchase all products—regardless of type—from their franchisors.

c. Franchisees are not required to purchase products from specific sources such as company commissaries, but they are required by franchisors to adhere to company-developed specifications in products purchased from any supplier.

d. As part of their agreement with franchisors, franchisees are permitted to purchase both food and non-food products for their operation from any supplier without restriction.

35. Ownership of product is transferred from the supplier to the food and beverage operation when the receiving employee signs the:

a. delivery invoice.

b. daily receiving report.

c. purchase order.

d. standard purchase specification sheet.

36. To help make the receiving function secure and efficient, the physical transfer of food and beverage products to the storage area should be the responsibility of:

a. supplier delivery personnel.

b. assigned staff from the property.

c. the food and beverage controller.

d. either a or c above.

37. How would fresh meats be categorized by an ABCD inventory classification system?

a. Class A: high in perishability and high in cost per serving

b. Class B: low in perishability and high in cost per serving

c. Class C: high in perishability and low in cost per serving

d. Class D: low in perishability and low in cost per serving

38. Which of the following statements about food products classified as “directs” is TRUE?

a. Usage rates and inventory levels determine the purchasing pattern for directs.

b. Directs are recorded in inventory records.

c. Directs are considered part of the food costs for the day on which they are received and stored.

d. Directs are controlled by a minimum/maximum inventory system.

39. Which of the following food service control points links receiving and issuing functions?

a. issuing

b. storing

c. purchasing

d. accounting

40. When a distributor shreds whole cabbages and places the shredded cabbage in bags for sale to restaurants, the distributor has added __________ value to the product.

a. form

b. time

c. informational

d. place

41. According to the reading: Food Distribution, which of the following is not a distribution alternative in theory?

a. Self-distribution

b. Order from national or regional broad-line distributors

c. Developing a primary-vendor relationship with a broad-line distributor

d. Contracting for delivery with a systems specialist

e. Catalog online ordering

Answer the questions 41 and 42 based on the following table.

Physical Inventory

Type of Products _____________________ Month _______________

Amount in

product

Storage unit

storage

purchase cost

ground beef

10-lb bag

6 bags

$

2.55/lb

canned peaches

6#10/cs

3-3/6 cs

$

39.00/cs

flour

50 lb/bag

2 bags

$

24.10/bag

42. In the table above, “3-3/6 cs” denotes

a. 3.83 cases

b. 3.50 cases

c. 3.36 cases

d. 3.30 cases

43. According to the table above, the total value of the physical inventory is:

a. $212.87

b. $200.00

c. $194.54

d. $192.20

e. $337.70

Several yield tests for roasting rounds of beef have been carefully undertaken. A summary of results (average per round) follows:

As purchased (AP) Weight = 22lb 8 oz

Servable (EP) weight = 18 lb

Cost (AP) = $8.00 per lb

According to the above test results, answer the questions from 43 -45

44. The cost per servable pound is:

a. $10.13

b. $10.00

c. $8.00

d. Cannot determine

45. How many pounds of rounds should be purchased for a weekend event being planned for 275 guests, if the edible portion served on each plate should weighs 6 oz?

a. 129 lb

b. 131 lb

c. 103 lb

d. Cannot determine.

46. If the purchase price (AP) per pound raises to $10, the cost of servable pound is:

a. $12.00

b. $ 11.00

c. $12.50

d. $ 11.50

Perpetual Inventory

Product Name: Frozen lobsters (case)

Carried forward: __0______

Date

In

Out

Balance

1/7

3

3

1/9

2

1

1/10

1

0

1/12

5

1

4

1/15

2

2

47. According to the perpetual inventory sheet shown above, there should be ______ cases in the inventory on Jan. 15.

a. 2

b. 3

c. 4

d. 0

Part II. Short Answer ( 24 credits)

48. What are the major differences between restaurants within hotels and freestanding restaurants (2 credits)? How these differences may create unique operation challenges to the food service operations within lodging facilities (2 credits)?

49. The following are the main factors suggested to consider when designing cost control systems for food operations. Circle ONLY five of them and explain how these factors should be considered when designing food cost control systems for a restaurant. (5 credits)

50. (1) What is a purchase specification (1 credit) ? (2) What essential piece of information must a written purchase specification include (3 credits) ? (3) Write a purchase specification for a RU Dinning menu item ingredient, beef patty, used for the Prime Rib burger (2 credits); (4) list the major benefits of developing a purchase specification for a food and beverage operation. (3 credits)

51. Select any one of the following control points and describe in details what an ideal cost control system should be for this control point (including control methods, measures, standards and standard procedures, if it is used for an independent freestanding restaurant (6 credits).