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Chapter 18 Labor Cost Considerations

This document discusses principles of food, beverage, and labor cost controls. It covers topics like direct and indirect labor costs, types of benefits provided to employees, and how to calculate labor costs and turnover rates. Formulas are provided for calculating break-even points and comparing labor costs between full-time and part-time staffing models.

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Arifin Fu
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123 views

Chapter 18 Labor Cost Considerations

This document discusses principles of food, beverage, and labor cost controls. It covers topics like direct and indirect labor costs, types of benefits provided to employees, and how to calculate labor costs and turnover rates. Formulas are provided for calculating break-even points and comparing labor costs between full-time and part-time staffing models.

Uploaded by

Arifin Fu
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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Principles of Food, Beverage, and Labor Cost Controls, Ninth Edition

Direct: salaries, wages, tips, bonuses, commissions Indirect: paid vacations, health benefits, life insurance, free meals, free living accommodations, use of employeroperated recreational facilities, discounts on accommodations at other properties within a chain

Pension benefits Social Security

Labor turnover rate Training Labor legislation Labor contracts Use of part-time staff Outsourcing Sales volume Location

Equipment Layout Preparation Service Menu Hours of operation Weather Competent management

Labor turnover rate = Number of departing employees Total number of employees on staff Break-even for staying open an additional hour = Fixed costs (1 Variable rate)

With all full-time staff

Wages: 4 dishwashers 35 hours $7 per hour = $980 Benefits: $980 20% = $196 Total labor cost: $1,176

With full-time and part-time staff


Full-time dishwashers Wages: 2 dishwashers 35 hours $7 per hour = $490 Benefits: $490 20% = $98
Part-time dishwashers Wages: 10 shifts 7 hours $4.50 per hour = $315 Benefits: $315 10% = $31.50 Total labor cost: $934.50
John Wiley & Sons, Inc. 2009

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