Dr. David K. Hayes has over 40 years of experience in the field of hospitality management and education. He initiated the highly regarded hospitality management program at Texas Tech University, and has held faculty positions at Purdue University and the University of Houston’s Conrad Hilton College of Hotel Administration. An accomplished business professional and educator, Dr. Hayes’ hospitality industry experience is varied and includes owning and managing a full-service hotel and conference center in Lansing, Michigan. In 2005, he formed Panda Professionals Hospitality Management and Training (www.pandapros.com), a training resources company that develops customized hospitality education-related solutions, which include computer simulations, print publications, training, and seminars. Dr. Hayes is a prolific author, having published over a dozen textbooks, including versions translated into Chinese, Japanese, Italian, Portuguese, Croatian and Spanish. Lea R. Dopson (1963-2022) was Dean and James A. Collins Distinguished Chair of The Collins College of Hospitality Management at Cal Poly Pomona. She previously served as Department Chair of Hospitality and Tourism Management at the University of North Texas, and taught at Cal Poly Pomona, the University of Houston, and Texas Tech University.

• Preface ixChapter 1: Managing Revenue and Expense 1Professional Foodservice Manager 2Profit: The Reward for Service 3Getting Started 6Understanding the Income (Profit and Loss) Statement 15Understanding the Budget 19Chapter 2: Creating Sales Forecasts 29Importance of Forecasting Sales 30Sales Histories 32Maintaining Sales Histories 38Sales Variances 39Predicting Future Sales 41Chapter 3: Purchasing and Receiving 59Forecasting Food Sales 60Forecasting Beverage Sales 62Importance of Standardized Recipes 66Purchasing Food 71Purchasing Beverages 79Purchase Orders 84Receiving Food and Beverage Products 87Chapter 4: Managing Inventory and Production 107Product Storage 108Storing Food Products 108Storing Beverage Products 113Inventory Control 115Product Issuing and Restocking 124Managing Food Production 134Managing Beverage Production 142Chapter 5: Monitoring Food and Beverage Product Costs 155Cost of Sales 156Computing Cost of Food Sold 156Computing Cost of Beverage Sold 159Computing Costs with Transfers 160Utilizing the Cost of Sales Formula 161Reducing the Cost of Sales Percentage 178Chapter 6: Managing Food and Beverage Pricing 200Menu Formats 201Menu Specials 206Factors Affecting Menu Pricing 206Assigning Menu Prices 215Special Pricing Situations 219Chapter 7: Managing the Cost of Labor 238Labor Expense in the Hospitality Industry 239Evaluating Labor Productivity 242Maintaining a Productive Workforce 243Measuring Current Labor Productivity 260Managing Payroll Costs 272Reducing Labor-Related Costs 283Chapter 8: Controlling Other Expenses 295Other Expenses 296Controllable and Non-Controllable Other Expenses 296Fixed, Variable, and Mixed Other Expenses 298Monitoring Other Expenses 302Managing Other Controllable Expenses 305Examining Non-Controllable Expenses 317Chapter 9: Analyzing Results Using the Income Statement 329Introduction to Financial Analysis 330Uniform System of Accounts 331Income Statement (USAR Format) 332Analysis of Sales/Volume 337Analysis of Food Expense 340Analysis of Beverage Expense 343Analysis of Labor Expense 345Analysis of Other Expenses 348Analysis of Profits 349Chapter 10: Planning for Profit 364Financial Analysis and Profit Planning 365Menu Analysis 365Cost/Volume/Profit Analysis 377The Budget 382Developing the Budget 385Monitoring the Budget 391Chapter 11: Managing the Revenue Control System 409Revenue Security 410External Threats to Revenue Security 414Internal Threats to Revenue Security 420Developing the Revenue Security System 425Managing the Revenue Security System 438Glossary 447Appendix A: Frequently Used Formulas for Managing Operations 455Index 463

Dr. David K. Hayes has over 40 years of experience in the field of hospitality management and education. He initiated the highly regarded hospitality management program at Texas Tech University, and has held faculty positions at Purdue University and the University of Houston’s Conrad Hilton College of Hotel Administration. An accomplished business professional and educator, Dr. Hayes’ hospitality industry experience is varied and includes owning and managing a full-service hotel and conference center in Lansing, Michigan. In 2005, he formed Panda Professionals Hospitality Management and Training (www.pandapros.com), a training resources company that develops customized hospitality education-related solutions, which include computer simulations, print publications, training, and seminars. Dr. Hayes is a prolific author, having published over a dozen textbooks, including versions translated into Chinese, Japanese, Italian, Portuguese, Croatian and Spanish. Lea R. Dopson (1963-2022) was Dean and James A. Collins Distinguished Chair of The Collins College of Hospitality Management at Cal Poly Pomona. She previously served as Department Chair of Hospitality and Tourism Management at the University of North Texas, and taught at Cal Poly Pomona, the University of Houston, and Texas Tech University.

• Preface ixChapter 1: Managing Revenue and Expense 1Professional Foodservice Manager 2Profit: The Reward for Service 3Getting Started 6Understanding the Income (Profit and Loss) Statement 15Understanding the Budget 19Chapter 2: Creating Sales Forecasts 29Importance of Forecasting Sales 30Sales Histories 32Maintaining Sales Histories 38Sales Variances 39Predicting Future Sales 41Chapter 3: Purchasing and Receiving 59Forecasting Food Sales 60Forecasting Beverage Sales 62Importance of Standardized Recipes 66Purchasing Food 71Purchasing Beverages 79Purchase Orders 84Receiving Food and Beverage Products 87Chapter 4: Managing Inventory and Production 107Product Storage 108Storing Food Products 108Storing Beverage Products 113Inventory Control 115Product Issuing and Restocking 124Managing Food Production 134Managing Beverage Production 142Chapter 5: Monitoring Food and Beverage Product Costs 155Cost of Sales 156Computing Cost of Food Sold 156Computing Cost of Beverage Sold 159Computing Costs with Transfers 160Utilizing the Cost of Sales Formula 161Reducing the Cost of Sales Percentage 178Chapter 6: Managing Food and Beverage Pricing 200Menu Formats 201Menu Specials 206Factors Affecting Menu Pricing 206Assigning Menu Prices 215Special Pricing Situations 219Chapter 7: Managing the Cost of Labor 238Labor Expense in the Hospitality Industry 239Evaluating Labor Productivity 242Maintaining a Productive Workforce 243Measuring Current Labor Productivity 260Managing Payroll Costs 272Reducing Labor-Related Costs 283Chapter 8: Controlling Other Expenses 295Other Expenses 296Controllable and Non-Controllable Other Expenses 296Fixed, Variable, and Mixed Other Expenses 298Monitoring Other Expenses 302Managing Other Controllable Expenses 305Examining Non-Controllable Expenses 317Chapter 9: Analyzing Results Using the Income Statement 329Introduction to Financial Analysis 330Uniform System of Accounts 331Income Statement (USAR Format) 332Analysis of Sales/Volume 337Analysis of Food Expense 340Analysis of Beverage Expense 343Analysis of Labor Expense 345Analysis of Other Expenses 348Analysis of Profits 349Chapter 10: Planning for Profit 364Financial Analysis and Profit Planning 365Menu Analysis 365Cost/Volume/Profit Analysis 377The Budget 382Developing the Budget 385Monitoring the Budget 391Chapter 11: Managing the Revenue Control System 409Revenue Security 410External Threats to Revenue Security 414Internal Threats to Revenue Security 420Developing the Revenue Security System 425Managing the Revenue Security System 438Glossary 447Appendix A: Frequently Used Formulas for Managing Operations 455Index 463

Dr. David K. Hayes has over 40 years of experience in the field of hospitality management and education. He initiated the highly regarded hospitality management program at Texas Tech University, and has held faculty positions at Purdue University and the University of Houston’s Conrad Hilton College of Hotel Administration. An accomplished business professional and educator, Dr. Hayes’ hospitality industry experience is varied and includes owning and managing a full-service hotel and conference center in Lansing, Michigan. In 2005, he formed Panda Professionals Hospitality Management and Training (www.pandapros.com), a training resources company that develops customized hospitality education-related solutions, which include computer simulations, print publications, training, and seminars. Dr. Hayes is a prolific author, having published over a dozen textbooks, including versions translated into Chinese, Japanese, Italian, Portuguese, Croatian and Spanish. Lea R. Dopson (1963-2022) was Dean and James A. Collins Distinguished Chair of The Collins College of Hospitality Management at Cal Poly Pomona. She previously served as Department Chair of Hospitality and Tourism Management at the University of North Texas, and taught at Cal Poly Pomona, the University of Houston, and Texas Tech University.

• Preface ixChapter 1: Managing Revenue and Expense 1Professional Foodservice Manager 2Profit: The Reward for Service 3Getting Started 6Understanding the Income (Profit and Loss) Statement 15Understanding the Budget 19Chapter 2: Creating Sales Forecasts 29Importance of Forecasting Sales 30Sales Histories 32Maintaining Sales Histories 38Sales Variances 39Predicting Future Sales 41Chapter 3: Purchasing and Receiving 59Forecasting Food Sales 60Forecasting Beverage Sales 62Importance of Standardized Recipes 66Purchasing Food 71Purchasing Beverages 79Purchase Orders 84Receiving Food and Beverage Products 87Chapter 4: Managing Inventory and Production 107Product Storage 108Storing Food Products 108Storing Beverage Products 113Inventory Control 115Product Issuing and Restocking 124Managing Food Production 134Managing Beverage Production 142Chapter 5: Monitoring Food and Beverage Product Costs 155Cost of Sales 156Computing Cost of Food Sold 156Computing Cost of Beverage Sold 159Computing Costs with Transfers 160Utilizing the Cost of Sales Formula 161Reducing the Cost of Sales Percentage 178Chapter 6: Managing Food and Beverage Pricing 200Menu Formats 201Menu Specials 206Factors Affecting Menu Pricing 206Assigning Menu Prices 215Special Pricing Situations 219Chapter 7: Managing the Cost of Labor 238Labor Expense in the Hospitality Industry 239Evaluating Labor Productivity 242Maintaining a Productive Workforce 243Measuring Current Labor Productivity 260Managing Payroll Costs 272Reducing Labor-Related Costs 283Chapter 8: Controlling Other Expenses 295Other Expenses 296Controllable and Non-Controllable Other Expenses 296Fixed, Variable, and Mixed Other Expenses 298Monitoring Other Expenses 302Managing Other Controllable Expenses 305Examining Non-Controllable Expenses 317Chapter 9: Analyzing Results Using the Income Statement 329Introduction to Financial Analysis 330Uniform System of Accounts 331Income Statement (USAR Format) 332Analysis of Sales/Volume 337Analysis of Food Expense 340Analysis of Beverage Expense 343Analysis of Labor Expense 345Analysis of Other Expenses 348Analysis of Profits 349Chapter 10: Planning for Profit 364Financial Analysis and Profit Planning 365Menu Analysis 365Cost/Volume/Profit Analysis 377The Budget 382Developing the Budget 385Monitoring the Budget 391Chapter 11: Managing the Revenue Control System 409Revenue Security 410External Threats to Revenue Security 414Internal Threats to Revenue Security 420Developing the Revenue Security System 425Managing the Revenue Security System 438Glossary 447Appendix A: Frequently Used Formulas for Managing Operations 455Index 463