HTM 2030 Lecture Notes - Lecture 5: Fixed Cost

• School: University of Guelph
• Department: Hospitality and Tourism Management
• Course: HTM 2030
• Professor: William Murray

Document Summary

Chapter 4 the control process: purchasing and receiving. Operating statement: sales variable costs fixed costs = profit. By maintaining cost levels (spending) without negatively impacting business levels, projected profits can be achieved. So : it makes sense to pay close attention to those costs that we can influence on a daily basis, food costs + beverage costs + variable labour costs = variable costs. Control process 4 steps: establish standards and standard procedures, train employees, monitor against standards, remedial/corrective actions when needed. The goals of controls are to avoid the development of any excessive or unnecessary costs. The buying of supplies for production and sale by a business: ensuring sufficient quantity is on hand at the appropriate quality, purchased at a favourable price. Fresh items; relatively short useful life (i. e. banana) Should be purchased for immediate use to maintain quality and minimize waste. Also called directs they go directly into our expenses (used very fast: non perishable foods.