Research On Operating Cost Control In KRR Food And Beverage Enterprise

Food and beverage industry is a traditional service industry in China. It is also regarded as "sunrise industry" of the service industry and "eternal sunrise industry". People’s living standard gradually improved and consumption habits changed since China’s inform and opening up. This leads to the boost of food and beverage industry. With the increasing competition, the food and beverage industry is not extravagant profitable any more. It is entering in a low profit era. Meanwhile, food and beverage enterprises are facing increasing pressure of both competition and operating. Increasing food material, labor costs, rental costs, have the direct effects on the profitability and sustainable development of the enterprise. The rising costs have become an inevitable problem for all food and beverage enterprises. To survive in the increasingly intense competitive environment, cost control is not just an important management tool, is also the core content of enterprise management.For the food and beverage enterprises, operating cost is the cost of food materials. It is the highest cost of enterprise, usually occupies 30%- 40% of the enterprise revenue. Operating cost plays a very important role in the cost control as the high percentage of the revenue. KRR is American roast chain brand, is a new player in China mainland market. The enterprise is facing the pressing pressure of operating cost control. Some problems need be solved urgently such as out-dated management tool, careless means of management, lagged control, lack of cost control consciousness, limited attention on purchasing plan, ignored supervision of purchasing power, lack of comprehensive evaluation of supplier management. All these problems urge KRR enterprise to strengthen operating cost control.Through the analysis of cost accounting system of food and beverage enterprise, and considering the feasibility of cost control and control space, this paper concludes that control of operating cost mainly depends on the control of both food materials actual usage and purchase price. This paper is based on the standard cost theory and internal control theory. This paper proposes an improvement program on the control of operating cost to solve the problems that KRR food and beverage enterprise is facing. First, the actual usage control of food material on the restaurant operating level is strengthened by the adoption of standard cost method. Secondly, the purchase price control of food material is improved by strengthening internal control on the purchasing level. Finally, the achievement of operating cost control is ensured by the integrated control of both food material usage and price.In this paper, the improvement program is designed based on combination of traditional standard cost control theory and internal control theory. This paper combines the basic theory study and specific case study, solves the problem of operating cost control in food and beverage industry. Meanwhile, it enriches the theory literature of enterprise operating cost control, expands the theory application of operating cost control.KRR is a typical restaurant chain enterprise. By the specific case study of KRR, this paper hopes to provide guidance for other food and beverage enterprises to strength operating cost and improve profit. This paper contains certain social application value.