homg 483
Homework # 8
Chapter 10
1. List and discuss 5 problems that can lead to differences between actual cost and standard cost for an operating period, pointing out how each increases potential savings.
Any number of problems can develop in day-to-day operations that will lead to differences between standard and actual costs. These include overpurchasing, overproduction, pilferage, spoilage, improper portioning, and failure to follow standard recipes, among many others. There are two methods for comparing actual and standard costs. The first requires daily calculation of standard costs and actual costs for the day and for all the days thus far in the operating period (week or month). The second method does not require daily calculation, relying instead on periodic determination of standard costs from records of actual portion sales in the period. The first method offers the advantage of immediacy and all its attendant benefits, but it does require considerable staff time daily. The second method, although saving many hours of staff time, lacks immediacy.
2. Discuss the advantages and disadvantages of calculating and comparing standard and actual costs by the daily method rather than by the periodic method.
Daily reports are prepared to compare actual and standard costs to date, and the last of these in a given period is a final summary report for the period. The second method does not require daily calculation, relying instead on periodic determination of standard costs from records of actual portion sales in the period. The first method also offers the advantage of immediacy and all its attendant benefits, but it does require considerable staff time daily. The second method, although saving many hours of staff time, lacks immediacy.
12.) Define each of the key terms in this chapter:
Abstract –is the right- hand portion of the Menu Pre- Cost and Abstract.
Actual cost percent- the ratio of actual cost of sales to total sales for a
Chapter 10
1. List and discuss 5 problems that can lead to differences between actual cost and standard cost for an operating period, pointing out how each increases potential savings.
Any number of problems can develop in day-to-day operations that will lead to differences between standard and actual costs. These include overpurchasing, overproduction, pilferage, spoilage, improper portioning, and failure to follow standard recipes, among many others. There are two methods for comparing actual and standard costs. The first requires daily calculation of standard costs and actual costs for the day and for all the days thus far in the operating period (week or month). The second method does not require daily calculation, relying instead on periodic determination of standard costs from records of actual portion sales in the period. The first method offers the advantage of immediacy and all its attendant benefits, but it does require considerable staff time daily. The second method, although saving many hours of staff time, lacks immediacy.
2. Discuss the advantages and disadvantages of calculating and comparing standard and actual costs by the daily method rather than by the periodic method.
Daily reports are prepared to compare actual and standard costs to date, and the last of these in a given period is a final summary report for the period. The second method does not require daily calculation, relying instead on periodic determination of standard costs from records of actual portion sales in the period. The first method also offers the advantage of immediacy and all its attendant benefits, but it does require considerable staff time daily. The second method, although saving many hours of staff time, lacks immediacy.
12.) Define each of the key terms in this chapter:
Abstract –is the right- hand portion of the Menu Pre- Cost and Abstract.
Actual cost percent- the ratio of actual cost of sales to total sales for a