The Objectives and Advantages of Cost Control

Objectives of Cost Control

To analyze income and expenditure:- In financial accounts, stress is usually placed on the ascertainments of total cost and profit i.e. cost of sales, gross profit. In food cost control, on the other hand, much stress is placed on the various departments or a section of a business.

Gross profit = sales – food cost

Net profit = sales – (food cost + labour cost + overheads)

Pricing of food:- Another major objective of food cost control is to provide a sound basis for menu pricing. It will also help in costing price for various types of banquets and functions. It also helps in giving quotations.

Sale = food cost + labour cost + overheads + profit

Prevention of inefficiencies:- We know that purpose of control is to ensure the current result are in accordance with the predetermined objectives which were expressed in terms of targets, costs, selling and profit margins. If such objectives are to be reached all possible forms of wastage and inefficiency should be prevented. In order to be effective in preventing waste inefficiencies, a system of food cost control must cover the whole field of catering operation right from the purchase of foodstuff to the sale of a prepared meal.

Data for the management:- The system of food cost control has an important function to fulfil in providing data for individual reports on food operations.

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