Get premium membership and access questions with answers, video lessons as well as revision papers.
a) Overall percentage gross profit and basic price levels:
The management must consider the gross profit they give in order to get the targeted profit. Also,
the following factors will determine the basic price levels;
1. The type of establishment
2. Average spending power
3. Type of client
4. Portion size
5. Food quality standard
6. Competitors
7. Location
b)Departmental profit margin
A business with different departments may have different price levels and may operate at
different percentage of gross profit in each department. Eg a hotel may aim at 65% GP on all
banqueting sales and 55% in all other food sales. When formulating a price policy it is necessary
to identify all the selling outlets and determine the correct gross profit margin of each outlet.
c)Gross profit differentials
In most establishments, they normally don’t apply a uniform rate of GP to all items on a
particular menu. Some items will have higher % while others will have a lower one. The
projected sales mix will determine the cost of sales for each department of the business eg food,
beverage, tobacco, sundry, etc.
d)Other related matters
Most catering establishment has additional charges to their prices of meals or in their bills.eg
1. 5% cover charge; this is the charge to customers before entering the establishment. It
discourages people going in for fun in the establishment without any aim.
2. Minimum charge; its charged in an establishment operating in full capacity and is to
exclude low spenders in order to have space for those who can afford. It is mostly
introduced during peak period.
3. Service charge; this is a charge to customers for all the services offered.
4. Value added tax; this was introduced in 1975 in the UK. VAT is chargeable at a standard
rate of 15% on the supply of food and drink for consumption on the premises in which it
is supplied or for immediate consumption near the place of supply. This means sales by
restaurants, cafes, hotels, pubs, snack bars etc. the following items are not chargeable;
a) Accommodation where the stay is in excess of four weeks.
b) Visitors paid out
c) Newspapers sold to guests.
NatalieR answered the question on May 16, 2022 at 12:04
- Outline the pricing objectives of food and beverage control.(Solved)
Outline the pricing objectives of food and beverage control.
Date posted: May 16, 2022. Answers (1)
- List the equipment used in portion control(Solved)
List the equipment used in portion control
Date posted: May 16, 2022. Answers (1)
- Highlight the objectives of preparing standard recipes(Solved)
Highlight the objectives of preparing standard recipes
Date posted: May 16, 2022. Answers (1)
- What are the factors to consider when doing final forecasting?(Solved)
What are the factors to consider when doing final forecasting?
Date posted: May 16, 2022. Answers (1)
- Briefly explain methods used to forecast(Solved)
Briefly explain methods used to forecast
Date posted: May 16, 2022. Answers (1)
- Define Volume Forecasting and highlight its objectives(Solved)
Define Volume Forecasting and highlight its objectives
Date posted: May 16, 2022. Answers (1)
- Outline the main objectives of food and beverage control during preparation(Solved)
Outline the main objectives of food and beverage control during preparation
Date posted: May 16, 2022. Answers (1)
- Outline the main causes of differences between actual and book balances of stock(Solved)
Outline the main causes of differences between actual and book balances of stock
Date posted: May 16, 2022. Answers (1)
- What are the problems of low stock turnover?(Solved)
What are the problems of low stock turnover?
Date posted: May 16, 2022. Answers (1)
- £ 2900 of food purchased was consumed in a 28 days trading period.
The opening stock on day 1 was valued at £750; the closing stock...(Solved)
£ 2900 of food purchased was consumed in a 28 days trading period.
The opening stock on day 1 was valued at £750; the closing stock on day 28 was valued at £650.
Calculate the rate of stock turnover.
Date posted: May 16, 2022. Answers (1)
- List and explain types of stock levels(Solved)
List and explain types of stock levels
Date posted: May 16, 2022. Answers (1)
- Explain two levels of stocking and for each highlight its dangers(Solved)
Explain two levels of stocking and for each highlight its dangers
Date posted: May 16, 2022. Answers (1)
- Enumerate details found in requisition sheet(Solved)
Enumerate details found in requisition sheet
Date posted: May 16, 2022. Answers (1)
- Highlight the documents used in store keeping(Solved)
Highlight the documents used in store keeping
Date posted: May 16, 2022. Answers (1)
- Outline qualities of a good store.(Solved)
Outline qualities of a good store.
Date posted: May 16, 2022. Answers (1)
- Outline the purpose of a meat tag.(Solved)
Outline the purpose of a meat tag.
Date posted: May 16, 2022. Answers (1)
- What is the difference between a tag and tagging? (Solved)
What is the difference between a tag and tagging?
Date posted: May 16, 2022. Answers (1)
- Discuss the receiving procedure in food and beverage control(Solved)
Discuss the receiving procedure in food and beverage control
Date posted: May 16, 2022. Answers (1)
- What are the essentials of control system?(Solved)
What are the essentials of control system?
Date posted: May 16, 2022. Answers (1)
- Discuss the processes involved in control process of food and beverage control(Solved)
Discuss the processes involved in control process of food and beverage control
Date posted: May 16, 2022. Answers (1)