Tourism and Hospitality Accounting Restaurant Management

* For tourism and hotel businesses:

The content of production and business costs depends on each specific activity. Each type of activity has different characteristics, so the specific costs are also different:

- For tour guide activities, cost content includes:

+ Direct costs: are direct costs serving tourists during the tour such as accommodation, food, and entrance fees to tourist attractions.

+ Tour guide costs: Including salaries and salary deductions payable to tour guides.

+ Service management costs: This is the service cost for general management of the entire enterprise allocated to tour guiding activities. This cost is not included in the cost of tourism services, so it needs to be allocated according to reasonable standards.

- For the sleeping room business: This is a business activity to meet the accommodation needs of guests during their tour. The cost of this activity includes:

+ Material costs

+ Direct labor costs

+ Fixed asset depreciation costs

+ Cost of tools and equipment

+ Cost of purchased services (electricity, water, telephone, etc.)

- For food and beverage business (restaurant): This is the business activity of preparing food and beverage services for hotel guests and other visitors. The cost of this activity includes:

+ Direct material costs (main materials, auxiliary materials).

+ Direct labor costs for food preparation

+ Fuel and tool costs

+ Management costs

+ Other costs …

1.3. Subjects and methods of production cost accounting

1.3.1. Subjects of production cost accounting

Each enterprise has different business characteristics, so the cost collection objects are also different. Depending on the specific situation, the production cost accounting objects in the enterprise can be:

- Each product, product details, product groups, orders.

- Each workshop, production technology stage

For restaurant and hotel businesses, costs are often aggregated according to each business activity. That is, costs incurred related to a particular activity are aggregated separately for that activity. In addition, according to the requirements of the internal accounting regime, units can choose to aggregate costs according to the location of service business (dependent unit).

1.3.2. Production cost accounting method

This is a method used to collect and allocate production costs according to cost accounting objects. Normally, in today's businesses, there are two methods of collecting and allocating costs as follows:

a/ Direct cost aggregation method:

This method is used to aggregate costs that are directly related to each separately identified cost aggregation object, that is, for costs incurred in relation to an object that can be directly identified to that object.

This method requires accountants to organize accounting work specifically and meticulously from the initial document preparation stage, organizing the account system, accounting book system... according to the identified cost aggregation objects.

b/ Indirect collection and allocation method:

This method is used to aggregate indirect costs, which are costs incurred in connection with multiple identified cost aggregation objects that accountants cannot directly aggregate to each of those objects.

To collect and allocate production costs to related objects, accountants must proceed in the following order:

+ Step 1: Collect costs that need to be allocated

+ Step 2: Determine the allocation coefficient according to the following formula:

H spb =

Formula 6.1: Cost allocation coefficient In which: H: Cost allocation coefficient

C: Total cost to be allocated to objects T: Total allocation criteria

+ Step 3: Determine the cost to be allocated to each specific object: C i = H x T i

Formula 6.2: Cost allocation for each object

In which: C i : Cost portion allocated to object i T i : Allocation criterion of object i

2. Product cost accounting

Target:

- Present the concept of product cost

- Classify prices

- State the methods of calculating product costs.

2.1. Concept of product cost

Product cost is the monetary expression of all expenses on live labor and materialized labor related to the volume of products and services completed during the period.

2.2. Cost classification

2.2.1. Classification by time and cost calculation data basis:

- Planned cost: Is the product cost calculated based on planned production costs and planned output. Determined before production. Z KH is the target to strive for and the basis for analyzing the implementation of the plan.

- Standard cost: Is the cost calculated based on current cost standards and only calculated for 1 product unit. This is the exact measure to determine the results of using assets, materials, and labor, helping to properly evaluate economic solutions to improve production and business efficiency.

- Actual cost: Is the product cost calculated based on actual production cost data collected during the period and actual product output produced during the period. This cost is only calculated after the production process is completed. This is the basis for determining the business results of the enterprise.

2.2.2. Classification by calculation scope:

- Production cost (factory cost): includes production costs calculated for products and completed work. It is the basis for recording finished products in inventory accounting books and the basis for calculating cost of goods sold.

- Total cost: includes production cost + selling cost + business management cost calculated for that product. This is the basis for calculating and determining the business results of the enterprise.

2.3. Subjects and methods of calculating product cost

2.3.1. Subject

- In a manufacturing enterprise, the costing objects are the products, jobs, and services that the enterprise has completed.

- In tourism and hotel businesses: Based on the characteristics of the service business organization to determine the appropriate cost calculation object.

+ For tour guiding activities, the cost calculation object is the tours (tour fares)

+ For bedroom business: The cost calculation object is the number of rooms/month according to each room type (special room, type I room, type II room...)

+ For other activities, you can calculate the cost per 1,000 VND of revenue or determine the cost for these activities by month to compare with the actual revenue.

2.3.2. Cost calculation method

a/ Direct method (simple method): Applied in enterprises with simple production types, small quantity of goods, large volume production and short production cycle. The corresponding cost calculation object is suitable for the accounting object that collects production costs, the periodic cost calculation period is monthly (quarterly) suitable for the reporting period.

Cost formula

Total cost of finished product (Z)

Product value

= unfinished goods + beginning of period (D condition )

Total manufacturing costs incurred during the period (C)

Product value

- End of period work in progress (D ck )

Unit product cost (z)

Formula 6.3: Total cost

Total cost of finished product (Z)

Number of products and completed services (Q)

Formula 6.4: Unit cost

Due to the characteristics of the hotel and restaurant business, production and consumption take place simultaneously. Production occurs as soon as consumption occurs, so there are no unfinished products. Therefore, the cost of products and services is the total actual cost incurred during the period.

Example 1: At restaurant X, the cost situation in June/Y is as follows: (unit: VND)

- Direct material cost: 120,000,000

- Direct labor cost: 70,000,000

- Cost of tools and equipment: 12,000,000

- Fixed asset depreciation cost: 30,000,000

- Cost of electricity, water and purchased services 8,000,000 Knowing that 1,200 meals were provided during the month.

Requirement: Based on the given documents, calculate the cost of 1 meal.

Solution

Total costs incurred during the period

- Direct material cost: 120,000,000 VND

- Direct labor cost: 70,000,000 VND

- General production costs are:

12,000,000 + 30,000,000 + 8,000,000 = 50,000,000 VND

Total cost of finished products during the period is:

120,000,000 + 70,000,000 + 50,000,000 = 240,000,000 VND

The cost of one meal is:

240,000,000 / 1,200 = 200,000 VND/meal

b/ Coefficient method: Applied in businesses that in the same production process use the same type of raw materials and the same amount of labor but simultaneously produce many different products and production costs must be aggregated for the entire production process.

According to this method, to calculate the cost, the coefficient of the product or service must first be determined. Determining this coefficient depends on the economic and technical standards of each product type that have been specified in advance. Select a product type with a coefficient of 1, other products are calculated according to the standards of the selected product type and are calculated according to the following formula:

Step 1: Calculate total converted output

Total converted output

= ∑( actual output SP ix Conversion factor SP i)

Formula 6.5: Total converted output

Step 2: Calculate the allocation coefficient for each product type

SP1 allocation coefficient

SP1 converted output

Total converted output

Formula 6.6: Allocation coefficient for each product type

Step 3: Calculate the actual cost of each product (by item)

Total cost SP1

= (CPDD DK + CPPS - CPDDCK) x Allocation coefficient

product

Formula 6.7: Total product cost

For example: At enterprise X, which produces two types of products A and B, the documents are as follows (unit: 1,000 VND)

- Production costs incurred during the period:

+ Direct material cost: 450,000

+ Direct labor cost: 73,800

+ General production cost: 15,000

Requirement: Calculate the total cost and unit cost of the product, knowing that at the end of the period the enterprise completed warehousing 1,200 products A and 1,500 products B. Conversion coefficient: SPA = 1; SPB = 1.2

Prize

Step 1: Calculate total converted output

- Product A: 1200 x 1 = 1200

- Product B: 1500 x1.2 = 1800

Total 3,000

Step 2: Calculate the allocation coefficient for each product type

SPA  1200  0.4

3000

SPB  1800  0.6

3000

B3: Calculate the total actual cost of each product type

Total cost of SPA

= 450,000 + 73,800 + 15,000 x 0.4 = 215,520

Total cost of product B

= 450,000 + 73,800 + 15,000 x 0.6 = 323,280

=> Unit cost of 1 product A is 215,520/1,200 = 179.6 (1,000 VND/product) Unit cost of 1 product B is 323,280/1,500 = 215.52 (1,000 VND/product)

* For tourism and hotel businesses, depending on each activity, appropriate cost calculation methods can be applied.

- For restaurants: to calculate the price of food and beverage products, the following methods can be used:

+ Cost plus method.

According to this method, first calculate the cost for a unit of food product and then calculate the selling price by adding a percentage of profit to the cost (this profit must be enough to pay for wages, management costs and other costs and a real profit). The calculation formula is as follows:

Selling price = Cost of 1 food product + Gross profit

+ Bottom-up pricing method

Suppose a restaurant can achieve a 20% net profit on its total sales price before taxes. The following figures might be set out:

Expected profit %

20%
Labor costs	25%
Fixed assets depreciation and overhead costs	10%
Other costs	10%
Total cost	65%

Maybe you are interested!

The remaining amount is food cost: 100% - 65% = 35%

This means that to achieve 20% profit, the food cost is 35%, the restaurant will price to achieve the above profit level.

For example: Sao Mai Restaurant prepares steamed fish with soy sauce, the costs are collected as follows:

coefficient.

Raw material cost	35%	50,000 VND
Labor costs	25%
Fixed assets depreciation and overhead costs	10%
Other costs	10%
Expected profit %	20%
=> Selling price = 50,000 100  142,857

- For the hotel room business, the method can be applied.

For example: At Huong Thao Hotel in March/N, 1,800 rooms were booked. Of which:

+ Special room: 40 turns

+ Room type I: 70 turns

+ Room type II: 1,690 turns

Based on the cost standards for each room type as a basis for determining the coefficient. Suppose the cost standards for a special room are 950,000 VND/day; Room type I is 830,000 VND/day; Room type II is 520,000 VND/day.

Suppose the choice of room type II has a coefficient of 1. Then the coefficients of other room types are calculated as follows:

Room coefficient = Special room cost standard = 950,000 = 1.8

Special Room Rate Type II 520,000

Similarly, we calculate the coefficient of type I room as 1.6. Determine the total number of standard rooms

+ Special room: 40 x 1.8 = 72

+ Room type I: 70 x 1.6 = 112

+ Room type II: 1,690 x 1 = 1,690

1,874

Suppose the total actual costs incurred during the month are summarized in the following table:

SUMMARY TABLE OF OPERATING COSTS OF HOTEL ROOMS

March/Year

EXPENSE ITEM

AMOUNT (1,000 VND)
1. Business costs	250,200
2. Wage and salary costs	185,530
3. Raw material costs	120,250
4. Fixed asset depreciation costs	150,000
5. Other costs	40,710
Add	746,690