HM 351 Lecture Notes - Lecture 8: Inventory Turnover, Lump Sum, Weighted Arithmetic Mean

• School: JMU
• Department: Hospitality Management
• Course: HM 351
• Professor: Tony Kim

Document Summary

Important chapter terms: closing inventory: physical inventory at the end of a period, expressed in terms of units, value, or both. Intraunit transfer: food or beverage transfer between departments in a single hotel, restaurant, or same establishment. Interunit transfer: food or beverage transfer between units in a chain: grease sales: dollar value of fats and oils sold to rendering companies. In the event that tax rates are high, some companies try to reduce profits on financial statements by using this method (no longer allowed) Cost of food sold / food sales = food cost % Total inventory = opening inventory + closing inventory. Inventory turnover = food cost / average inventory. Adjustments to cost of food issued: transfers. Interunit: steward sales, grease sales, gratis to bars, promotion expenses. Techniques for determining cost of employee meals: cost of separate issues, food different from what is being served to guests, prescribed amount per employee, ex.