Higher Food Cost and the IMPACT on PBO and/or Client budget performance
Running a higher than budgeted Food Cost has an immediate impact on your account Financial Performance, below is a sample process for you to determine what impact your over budget food cost has on the bottom line.
What impact to PBO would the 3.8% variance in over consumed food cost represent?
Your budgeted FC is 33.6%. To determine the PBO impact you would multiply your actual revenues by your budgeted food cost percentage which in this scenario is 33.6%.
You would then compare the $$$$ variance between your actual Food Cost and your budgeted amount on the lower revenues.
Sample Exercise
Revenues of $11,750 x 33.6% = $3,948.
Compare this number to your actual number of $4,400 to see the impact of running a higher than budgeted food cost.
$4,400 (actual FC) less $3948 (budgeted FC) =$452.
The amount of $452 has an immediate NEGATIVE IMPACT to PBO and Client budget performance.
You can try this exercise easily by using the data in your FOS for a specific week ending date range
Thanks
Kevin J Mclaughlin | Regional Director of Operations