Time: 3 hours
3 hours
This paper consists of TWO sections: A and B.
Section A is COMPULSORY and carries a total of FORTY marks.
Section B has FIVE questions worth TWENTY marks each.
Answer any THREE questions from section B.

SECTION A (40 Marks)
Answer ALL questions in this section.
1. State four objectives of stock control in a large catering establishment. (4 marks)

2. Highlight four points to consider when preparing a labour cost budget. (4 marks)

3. State four disadvantages of buying food commodities in bulk. (4 marks)

4. In the year 2009, 200 workers out of an average of 800 workers employed left unique restaurants. Calculate the labour turnover during the year. (4 marks)

5. Highlight four points to consider when determining economic order quantity. (4 marks)

6. Explain the following terms as used in cost control:
(i) seat turnover;
(ii) rotation of stock. (4 marks)

7. Outline four steps in the control process of a food and beverage operation. (4 marks)

8. State two disadvantages of each of the following purchasing methods:
(i) specialised market;
(ii) total suppliers. (4 marks)

8. Highlight four advantages of straight salary method of remuneration. (4 marks)

10. Explain the use of each of the following documents:
(i) invoice;
(ii) bin cards. (4 marks)

SECTION B (60 marks)
Answer any TIIREE questions from this section
11. (a) Distinguish between FIFO and UFO methods of valuing stock. (4 marks)
(b) A record of transactions in regard to rice for Angel Restaurant were as follows:
January 10 bought 100 kgs at Ksh.30 each
January 14 bought 100 kgs at Ksh.34 each
January 19 sold 80 kgs
January 22 bought 200 kgs at Ksh.40 each
January 28 sold 240 kgs


(i) Prepare the stores ledger card using LIFO method and determine cost of sales for the month. (12 marks)
(ii) Given that the monthly sales were Ksh.l8,000, determine the gross profit percentage for the month. (4 marks)
13. (a) Explain four advantages of automated order taking in a high class restaurant.
(8 marks)
(b) (i) Explain the meaning of the term gross profit. (2 marks)
(ii) Uncle Raymond””s restaurant intends to introduce fried fish in the menu. The food cost is Ksh.280. Calculate the selling price with a gross profit of 60%, 16% VAT and 10% service charge. (10 marks)
13. (a) Explain the following terms:
(i) marginal costing;
(ii) goodwill;
(iii) raw beverages. (6 marks)
(b) The following information was extracted from the books of Supper Restaurant in the month of December, 2010:
12 bales of wheat flour @ Ksh.864
15 crates of soda @ Ksh .360
5 crates of tusker @ Ksh.l,3 57
The opening stock was as follows:
6 packets of flour
15 bottles of soda
37 bottles of tusker
The following transactions were done during the same trading period:
106 packets of flour issued for production
112 bottles of soda and 150 bottles of tusker sold at the bar.
(i) calculate the value of the closing stock; (11 marks)
(ii) calculate the closing stock of each of the items. (3 marks)

14. (a) Highlight two circumstances under which a receiving clerk may advice the purchasing officer to send a request for credit to a supplier. (2 marks)

(b) A fast food restaurant features three entree items on its menu with the following cost and selling prices:



(i) calculate the food cost percentage for each item; (4 marks)
(ii) calculate the standard food cost percentage if 50 of each item are sold each day.
(14 marks)
15. (a) A manufacturing company operating 24 hours, 7 days a week, is looking for ways of providing its staff with meals. Explain any two ways this can be done.
(4 marks)

(b) Explain three functions of a control office in a catering establishment. (6 marks)

(c) The following figures were extracted from the sales budget of Kioko””s restaurant in
respect of January, 2011:


At the end of January 2011, it was ascertained that the:
• number of covers achieved during the period was: Dept A 8400, Dept B 5800, Dept C 4200
• the average spending power (ASP) was: Dept A Ksh. 10.40, Dept B Ksh.14.80 and Dept C Ksh.l2.60
• actual bar sales were Ksh.l2,500 and actual sundry sales amounted to Ksh.5,400.


Prepare a monthly sales report showing clearly the relevant variances. (10 marks)

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