Lecture Food and beverage cost control (5th Edition): Chapter 8 - Dopson, Hayes, Miller 

Chapter 8 - Controlling other expenses. This chapter presents the following content: Other expenses; controllable and non-controllable other expenses; fixed, variable, and mixed other expenses; monitoring other expenses; managing other expenses; technology tools.

Controlling Other 

Expenses

 In the past, serving water to each guest upon arrival in a 

restaurant was simply SOP (standard operating procedure)  for many foodservice operations.  The rising cost of energy  has caused many foodservice operations to implement a  policy of serving water on request rather than with each 

order.

 Energy conservation and waste reduction are two examples 

of attempts to control and reduce other expenses.

 Operators can use their own categories, or follow those used 

in the Uniform System of Accounts for Restaurants (USAR)

 A variable expense is one that generally increases 

as sales volume increases, and decreases as sales volume decreases

1% Variable Rent Expense

Total Rent Expense

Expense  Decreases Increases

is too high, he or she must either increase sales or negotiate better rates

only to whether an expense is fixed, variable, or 

mixed should not be of undue concern to 

management. It is only when a fixed expense is too high or a variable expense is out of control, that 

management should act. This is called 

management by exception

controllable rather than noncontrollable expenses. 

Figure 8.4 Fixed, Variable, and Mixed Expense Behaviors as Sales Volume Increases

Expense As a Percentage of Sales Total Dollars

Variable Expense Remains the Same Increases

Figure 8.5 Chez Scot Linen Cost %

Figure 8.6 Chez Scot Linen Cost per Guest

Month Linen Cost Number of Guests Served Cost per Guest

Figure 8.7: Average Paper Product Cost

Institution Cost of Paper

Products

Number of Students

Paper Product Cost per Student

O University $140,592.00 8,080 $17.40

C State University 109,200.00 6,500 16.80

P University 122,276.00 7,940 15.40 University of T 184,755.00 11,300 16.35

A State University 61,560.00 3,600 17.10 5-University Average 123,676.60 7,484 16.53 Juanita’s Institution 77,220.00 4,680 16.50

Figure 8.8: Six-Column Cost of Paper Products

Juanita’s Institution Date: 4/1–4/8

Other Expense Cost Number of Guests

Served Cost per Guest Weekday Today To Date Today To Date Today To Date

Monday $ 145.50 $ 145.50 823 823 $0.18 $0.18 Tuesday 200.10 345.60 751 1,574 0.27 0.22 Wednesday 417.08 762.68 902 2,476 0.46 0.31 Thursday 0 762.68 489 2,965 0 0.26 Friday 237.51 1,000.19 499 3,464 0.48 0.29 Saturday 105.99 1,106.18 375 3,839 0.28 0.29 Sunday 0 1,106.18 250 4,089 0 0.27 Monday 157.10 1,263.28 841 4,930 0.19 0.26

Figure 8.9 Igloo's Fixed and Variable Other Expenses

Sales

Fixed Expense

Variable Expense (10%)

Total Other Expense

Other Expense Cost %

management at its worst

Figure 8.10 Typical Energy Usage Pattern

Figure 8.11 Ten Commonsense Energy Tips for Restaurateurs

1 Turn It Off Turn off lights, cooking equipment, and exhaust fans when they are not being used

Activate the standby mode for office equipment, in-house computers, and printers to effectively put these pieces of equipment “to sleep”

when not in use

2 Keep It Closed Keep refrigerator doors closed

Keep back doors, if any, to the kitchen closed to minimize heat and cooling loss

3 Turn It Down Set air-conditioning units at 76°F (24.5°C) for cooling

Set heating systems at 68°F (20°C) for heating

Reduce the temperature of your hot water heater (where appropriate)

Adjust heating/cooling temperature settings when you close your operation for the night

4 Vent It Use ceiling fans to help recirculate dining room air

Retrofit exhaust hoods with both low and high speed fans, in dishroom areas and in food preparation and cooking areas

5 Change the Bulbs Replace incandescent bulbs with fluorescent They use 75% less electricity and last 10 times as long

Install photocell light sensors (motion detectors) where appropriate (storage areas and the like) to activate lighting only when needed

Figure 8.11 Ten Commonsense Energy Tips for Restaurateurs (continued)

6 Watch the Water Run dishwashers only when they are full

Replace/repair leaking faucets immediately

Insulate all hot water pipes

Install “water-saver” spray nozzles in dish areas

7 Cook Right Stagger preheat times for equipment to minimize surcharges for high energy use

Bake during off-peak periods

Idle cooking equipment (between meal periods) at reduced temperatures where appropriate

8 Seal It Caulk and weatherstrip cracks and openings around doors, windows, vents, and utility outlets

Check freezer, refrigerator, and walk-in seals and gaskets for cracks or warping Replace as needed

9 Maintain It Change air filters on a regular basis (monthly during peak heating and cooling seasons)

Clean grease traps on ventilation equipment

Clean air-conditioner and refrigeration condenser/evaporator coils at least every three months

Oil, lube, clean, and repair equipment as needed to maximize operating efficiency

10 Get Help Take advantage of any advisory services offered by your local utility company and governmental agencies

Talk to your heating, ventilation, and air-condition (HVAC) repair person

for tips on minimizing energy and maintenance costs with your

 One way to help ensure that costs are as low as possible is to 

use a competitive bid process before awarding contracts for  serviced you require.

 In the area of maintenance contracts, for areas such as 

kitchen or mechanical equipment, elevators, or grounds, it is  recommended that these contracts be bid at least once per  year. 

 Air­conditioning, plumbing, heating and refrigerated units 

should be inspected at least yearly, and kitchen equipment  should be inspected at least monthly for purposes of 

preventative maintenance. 

Figure 8.12 Equipment Inspection Report

Unit Name: Your Restaurant Time Period: 1/1 - 1/31

Item Inspected

Inspection Date

Inspected

A Refrigerator #6 1/1 D H Replace gasket

B Fryer 1/7 D H Inspected, no maintenance

needed

C Ice Machine 1/9 D H Drain, de-lime

D

E

these costs can represent a significant portion of the operation’s total expense requirements. As a result, controlling these costs is just as important as 

11 Income tax management

12 Income tax filing

should computerize their records related to taxes at all levels to ensure accuracy, safekeeping, and 

timeliness of required filings.