The cost structure of the restaurant industry can be divided into two main categories: direct costs and indirect costs. The so-called direct costs, refers to the cost of specific materials in the finished food and beverage products, including the cost of food and beverages, and is the most important expenditure in the catering business. By indirect costs, we mean other costs incurred in the operation, such as personnel costs and some fixed overheads (also known as recurring costs). Personnel costs include employee salaries, bonuses, room and board, training and benefits, etc.; recurring expenses are known as rent, utilities, depreciation of equipment, interest, taxes, insurance and other miscellaneous expenses. It can be seen that the scope of catering cost control, including direct costs and indirect cost control; where the design of the menu, the procurement of raw materials, the production process and the method of service, each stage is closely related to the direct costs, naturally, should be strictly supervised. And personnel management and other items of use and maintenance, should be fully integrated into the control system, in order to achieve the intended control objectives. (1) direct cost control Effective catering cost control is not to reduce expenditure or purchase low-cost raw materials in an attempt to save money, but rather refers to the scientific method to analyze the reasonableness of the expenditure, before all the actions are carried out, the planning of the year or month as a unit of the expenditure budget, and then monitor the entire process of spending whether or not it is in line with the established budget, and finally, to assess and review the way to amend the budget, improve the control system. Finally, evaluate and review to revise the budget and improve the control system. Steps of direct cost control a. Establishment of cost standards The establishment of cost standards is to determine the proportion of each expense. If we take food cost as an example, food cost also refers to the price of raw materials or semi-finished products of food at the time of purchase, but does not include labor and other expenses at the time of processing. The proportion of food cost depends on three factors: the price at the time of purchase; the portion size of each dish; and the selling price of the menu. b. Record the actual operating costs The catering industry often encounters some unexpected obstacles in the operation, sometimes man-made, resulting in waste, sometimes natural disasters affect the cost of raw materials, these factors will be directly reflected in the operating costs. Therefore, a true record of the operating process costs and against the estimated expenditure standards can immediately identify management deficiencies and improve the control system in a timely manner. The top ten factors affecting operating costs can be summarized as follows: delivery errors; improper storage; production consumption; cooking shrinkage; uneven portion control; improper service; intentional or unintentional cash shortfalls; failure to make full use of leftovers; employee theft; and supply of staff catering purposes. c. Comparison and Evaluation In general, actual costs are often higher or lower than standard costs, but when management should take action to investigate or correct the operation depends on the size of the gap. When managers set the gap in the standard, should first assess the amount of time and order of priority, so as not to put the cart before the horse, and can not achieve the real purpose of control. ② direct cost control methods catering products from the purchase of raw materials to sales, each process has a relationship with the cost of the details are: a. Menu design The manpower required for the production of each dish, time, raw materials, quantities and their supply situation will be reflected in the standard unit price, so the design of the menu should pay attention to the above factors, careful selection of the type of dishes and the number of dishes. The standard unit price is the cost of food required to prepare a dish for one person according to a recipe. It is calculated by dividing the sum of the prices of all the ingredients in the recipe by the total portion size. b. Purchasing of Ingredients Purchasing too much of an ingredient may cause difficulties in storage and increase the chances of food depletion (especially for fresh products), but too little of an ingredient may result in an oversupply and shortage of stock, and an increase in the unit price. Therefore, accurate sales forecasts, regular inventory counts, and the mobility to change part of the menu in order to keep a safe amount for use are all important points that purchasing and inventory managers need to pay attention to. c. Catering Production Inadvertent negligence on the part of the production staff, or improper control of temperature and time, or miscalculation of portion sizes, or improper handling of food will often result in food wastage and increase costs. Therefore, in addition to encouraging the use of standard recipes and standard portion sizes, cutting tests can also be used to tightly control the full utilization of food. d. Service method No standardized utensils are provided for use, leftover food is not properly handled, no detailed record of food sold and kitchen shipments, and delayed delivery of food to customers will cause food waste and damage, affecting costs, so pre-planning a proper service process will help control costs. Attachment: Catering practical formula (the same formula with the upstairs, can refer to)