Describe the methods used to assess variable labor costs. What will be an ideal ...

Operators seeking to manage and control variable labor costs can choose froma variety of assessment tools. These include the labor cost percentage, which isobtained by dividing the cost of labor by unit revenue achieved. Sales per laborhour is an assessment tool obtained by dividing total revenue achieved in adesignated time period by the number of labor hours used in that period.

Average wage per hour is calculated by dividing the cost of labor for a timeperiod by the number of labor hours used in the period. Covers per hour is anassessment tool calculated by dividing the number of covers (guests) served bythe number of labor hours used to serve the guests. Sales per hour is an assessmenttool obtained by dividing unit revenue by the number of employee hoursused to generate the revenue.

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F

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c

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The four key areas managers must address to control food-related costs arepurchasing, inventory management, product theft, and food production.The effective control of purchasing requires purchasing authority to rest withonly properly designated individuals. Deliveries of products should then bechecked against original purchase orders to ensure all items purchased havebeen delivered. As well, the vendor invoices to be paid for items purchasedmust be authorized prior to their payment and must be paid only once. Controlof inventory relates to minimizing loss due to improper storage techniques,ensuring proper stock rotation, and the regularly scheduled countingof inventory items. Minimizing theft requires managers to secure storage areasagainst potential theft by employees, vendors, and even customers. Productioncontrol requires that managers train their staff well in the production andportioning techniques that will minimize food loss and waste.


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T

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 Have a compelling vision that speaks to the collective imagination

 Develop a creative strategy that is responsive to enemy strength

 Create a well rounded executive team

 Model excellence

 Encourage innovation

 Manage symbols to foster group identification

 Encourage and support followers

 Invest in training and development

 Consolidate gains

 Plan for succession

 Create mechanisms for effective organizational governance

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they establish brand names and reputations for reliable service; they affiliate with chains or consortiums; they offer guarantees backed up by programs organized through trade associations; they have programs to certify their professionals

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d

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To implement a total cost control system managers take three important steps.In step 1, managers collect accurate sales and cost data. These historical dataare obtained from information contained in the operation's income statements(profit and loss reports, or P&Ls). Step 2 of the control process requiresmanagers to carefully monitor current sales and costs. They do so by recordingactual costs and conducting line item reviews that compare actual expenseswith budgeted or targeted expenses. Finally, in step 3, managers take correctiveaction, when needed, to implement operational changes that will bringcosts back in line with expectations and established goals.

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b