Costs & Sales Concepts and Income Statement Review

Fixed costs are unaffected by normal fluctuations in sales volume.

If a business is to be profitable, costs must always be:

Some examples of controllable costs are food, beverage, and labour.

food cost is $200,food sales is $500. Food Cost % is 2.5

Income Statement summarizes cost and sales information for a particular period.

Percentages are the most common standard used for evaluating costs in the foodservice industry

A sale is the exchange of products or services for value.

Food is considered a cost regardless if the food produced a sale

Sales may be expressed in terms of the number of units sold.

Inventory is needed for an accurate income statement

I love using the costing Triangle

Percentages on the income statement are calculated using the "Total Sales" amount, with 2 expections

Total Sales - Cost of Sales = Gross Profit

Labour costs consist of salary and hourly personnel?

Overhead Cost is an expense such as rent and utilities

Variable cost are related to business volume

Profit is the amount of money the restaurant made after deducting all cost require to operate the restaurant

Average Restauarnt profit is 9% to 15%

The term "Cost of Sales" refers to revenue that resulted from the exchange for a product or service

Prime cost is food cost, beverage cost, and labour cost.