CONFIDENTIAL 1 HM/DEC 2019/HTH250

UNIVERSITI TEKNOLOGI MARA

FINAL EXAMINATION

COURSE : FOOD AND BEVERAGE COST CONTROL

COURSE CODE : HTH250
DATE : DECEMBER 2019
TIME : 3 HOURS

INSTRUCTIONS TO CANDIDATES

1. This question paper consists of three (3) parts : PART A (15 Questions)
PART B (20 Questions)
PART C (8 Questions)

2. Answer ALL questions from all three (3) parts :

i) Answer PART A in the Objective Answer Sheet.

ii) Answer PART B in the True/False Answer Sheet.
iii) Answer PART C in the Answer Booklet. Start each answer on a new page.

3. Do not bring any material into the examination room unless permission is given by the invigilator.

4. Please check to make sure that this examination pack consists of :

i) the Question Paper

ii) an Answer Booklet – provided by the Faculty
iii) a True/False Answer Sheet – provided by the Faculty
iv) an Objective Answer Sheet – provided by the Faculty

5. Answer ALL questions in English.

DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO

This examination paper consists of 11 printed pages
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PART A

MULTIPLE CHOICE

Choose the most appropriate answer for each question. Shade your answer on the
Objective Answer Sheet.

1. Which of the following is not included in the Prime Cost category?

a) Food cost
b) Salaries and wages
c) Employee benefits
d) Occupancy cost

2. What is the seat turnover, given the total number of menu items sold is 420, the
number of customer served is 140 and the number of seats available is 75?

a) 1.87 turns
b) 3 turns
c) 5.6 turns
d) 7.47 turns

3. At an annual inflation rate of 4 percent, what should be the sales price of one a la
carte Nasi Lemak Ayam, six months from today given the present cost is RM4.21 and
the cost percent at that time is expected to be 35% of the menu sales price?

a) RM 12.51
b) RM 12.02
c) RM 12.27
d) RM 11.83

4. Which of the following is NOT the example of standard implemented in a restaurant?

a) A purchasing officer checking the weight of receiving items.

b) Two slices of cucumber in each Nasi Lemak served.
c) One ounce of spillage per 2-liter bottle of milk.
d) 75 covers served in an hour of operation.

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5. How can gross profit be calculated?

a) Total sales minus total cost of sales.

b) Adding total food cost with total beverage cost.
c) Total controllable expenses minus occupancy cost.
d) Adding total cost of sales with labor costs.

6. In CVP analysis, break-even point is a situation when

a) contribution margin is zero.

b) sales volume has increase.
c) profit is zero.
d) Sales volume is zero.

7. A restaurant that manages to increase its sales and maintain its food and beverage
cost will result in

a) higher F&B cost percentage

b) higher sales percentage
c) lower total sales
d) lower variable rate

8. Based on total sales of RM23,450 and contribution margin RM15,242, calculate the
restaurant’s variable rate.

a) 0.35
b) 0.68
c) 0.58
d) 0.42

9. The normal usage of a given item is 14 cans per day and a minimum of 3 days is
required for delivery. Determine how many cans are suitable for reorder point.

a) 42 cans
b) 72 cans
c) 83 cans
d) 63 cans

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10. It is important to locate a storage facility in an appropriate area because it can

a) minimize security.
b) maximize infestation of rodents.
c) distance away from the personnel.
d) speed-up the storing and issuing of food.

11. The basic data for developing a restaurant sales history is recorded by

a) the manager
b) the server
c) the chef
d) the cashier

12. Transfer of directs from kitchen to the bar is referred to as

a) cooking liquor
b) inter-unit transfers
c) food to bar
d) cooking wine

13. Direct purchases are added to food cost when they are

a) stored
b) inventoried
c) received
d) purchased

14. Some restaurants are successful in charging higher prices for their menu items
because their products are

a) homogeneous
b) price-sensitive
c) differentiated
d) common

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15. If sales volume for a product increases when the sales price is lowered, the product is
said to be

a) price-sensitive
b) differentiated
c) a signature item
d) challenge

(Total: 15 marks)

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PART B

TRUE AND FALSE

Shade the letter ‘T’ if the statement is True and ‘F’ if the statement is False on the
True/False Answer Sheet.

1. Cost of overhead is the cost associated with actually producing the menu items.

2. Payroll cost has both the fixed and the variable elements, thus it is known as
semivariable cost.

3. Standard procedure is the collection of interrelated and interdependent control

techniques and procedures used in a food and beverage operation.

4. The budget is a financial plan that will detail out the operational direction of a
business, which is generally static and cannot be modified.

5. The first step of control techniques available to a manager is preparing and following
budget.

6. Dollar sales required to break-even can be calculated if one knows fixed costs,
selling price, and average sale.

7. The owner of a nearby restaurant has arranged for a local baker to deliver enough
supply of white bread every morning. This is an example of a standing order.

8. If great care is taken to establish effective controls for purchasing but no attention is
given on receiving, all earlier efforts may be useless.

9. Butcher tests are used primarily to test the cutting skills of newly-hired butchers in
large commercial restaurants.

10. The first step in forecasting is to predict total anticipated volume for that day.

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11. The cost of food issued figure must be adjusted monthly to eliminate the cost of waste
and pilferage.

12. Transfer from kitchen to bar would increase daily food cost.

13. The dollar value of foods given away without charge at the bar that have been
previously added to food cost is known as gratis to bar.

14. Cost of food issued less cost of employees’ meals equal cost of food sold.

15. The value of opening inventory for any month is derived from the value of closing
inventory of the previous month.

16. One can determine the value of store issues by referring to the day’s requisition.

17. The actual inventory value is based from the records of purchasing and issuing.

18. The value of the book inventory should be identical to the value established for the
physical inventory taken at the end of the month.

19. The term ‘Food Store’ for any given day refers to the cost of direct for that day.

20. “Dupes” are customers to whom servers can readily sell their menu item.

(Total: 20 marks)

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PART C

SHORT ESSAY

Answer ALL questions.

QUESTION 1

The following information has been prepared by the manager of the Izhar Kaya & Beriman
Restaurant. By using this information, prepare an operating budget of the restaurant for the
next coming year.
Food sales : RM 1,110,000
Beverage sales : RM 350,700
Cost of food : 34% of food sales
Cost of beverages : 26% of beverage sales
Variable salaries and wages : 21% of food sales
Fixed salaries and wages : RM 180,000
Employee benefits : 28% of total salaries and wages
Other controllable expenses : RM 98,000
Depreciation : RM 55,500
Interest : RM 11,000
Occupancy costs : RM 65,000
(7 marks)

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QUESTION 2

Below is the statement of Taman Sari coffee house for the month of January, 2018.

Food Cost RM89,000

Occupancy cost RM12,000
Interest RM9,450
Depreciation RM10,550
Beverage cost RM25,750
Labor cost (fixed) RM57,889

From the above information, answer the following questions.

a) What is the restaurant’s sales if profit is RM97,336?

(2 marks)

b) What is the variable rate for this restaurant?

(2 marks)

c) Calculate the restaurant’s contribution rate?

(2 marks)

d) Calculate the restaurant break-even point in terms of dollar sales?

(2 marks)

e) Based on contribution rate calculated in (c) above, what level of dollar sales is
required in order for the restaurant to earn a target profit of RM130,000?
(2 marks)
(Total: 10 marks)

QUESTION 3

a) Café de Paris uses the periodic order method, placing orders every two weeks. The
restaurant’s desired ending inventory for the item is 8 cans. At the time of inventory,
the quantity on hand is 12 cans. Determine the quantity of canned pineapple needed
to order today if the normal usage is 24 cans per week.
(4 marks)

b) Rebak Restaurant uses the perpetual order method. The restaurant normal usage of
canned asparagus is 4 cans per day. It takes 3 days to get the items to be delivered
to the restaurant. Determine the reorder point and reorder quantity if the par stock is
35 cans. Note that the 50 % safety factor is applied.
(4 marks)

(Total: 8 marks)

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QUESTION 4

An effective control process can be applied for storing and issuing to reduce or eliminate the
development of unnecessary costs. As a foodservice manager, discuss five (5) food storage
standard concerns in order to reduce the unwanted costs in your restaurant.

(10 marks)

QUESTION 5

Below are the sales figures from a restaurant in Senafas Cafe

Item Portions sold

Ayam Percik 82
Ayam Panggang 77
Ayam Salai 41

a) Compute the popularity index.

(3 marks)

b) Predict the sales of each item if the total sales are expected to be 320
(3 marks)

(Total: 6 marks)

QUESTION 6

Bossnyer Steakhouse has bought a 72kg rib of beef at the cost of RM30.00 per kg. During
the production of the beef, 14% is loss through trimming process and 10% of the remaining
weight is loss through shrinkage during cooking process. The rib of beef is then portioned at
280gm per portion. From that information given, calculate:

a) The weight of edible portion from that beef.

(4 marks)

b) The number of portion available for sale.

(2 marks)

c) Cost per portion

(2 marks)

d) Cost factor per portion

(2 marks)

(Total: 10 marks)

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QUESTION 7

Given the following figures from the financial records of Greenock Restaurant for the month
of December 2018. Determine the cost of food issued, cost of food consumed, and cost of
food sold.

RM
Cooking liquor 3,000
Steward sales 500
Purchases 24,000
Food to bar (directs) 600
Gratis to bar 400
Closing inventory 8,000
Opening inventory 10,000
Employees’ meals 250 lunches @ RM5 each
300 dinners @ RM6 each

(Total: 6 marks)

QUESTION 8

Discuss two (2) advantages and disadvantages of using the technique of matching the
competitor’s prices.

(8 marks)

END OF QUESTION PAPER

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