Money Matters for Hospitality Managers, Cathy Burgess

This chapter aims to show how costs can be planned and their usage controlled
through standard costing. In Chapter 4 we looked at the monitoring of
costs and in 5 at pricing. Here we will consider how to plan spending the
correct amount on raw materials. This can be fairly complex in terms of
recipes, and a loss of standards can easily cause significant cost variances.
We will then look at identifying deviations from these standards what is
due to variances in price, and what is due to variances in quantity used. We
will also consider the specific problems of food and beverage materials,
which can cause them to be so difficult to manage.
Standard costing techniques can also be used in other areas. We discussed
the management of labour cost earlier but you can also use the technique to
monitor labour cost where a flexible workforce is employed and where
productivity is important to the profitability of the business. A further use
for the technique is in identifying variations in revenue and considering
whether differences there are due to volume or price (or both) as well.