© 2023 CrunchTime! Information Systems, Inc. All Rights Reserved. | www.crunchtime.com Compare Actual vs Theoretical Costs Quick Start Guide Document Details Document #: 160_QS1000_230221 Release Version: 10.00.00.00 Version Release Date: October 2022 System Requirements • CES Version 10.00.00 or higher Be sure to grab the latest version of this document here: https://links.crunchtime.com/NCQS-CompareActualVsTheoreticalCosts OR by scanning the QR code to the left. Related User Group Permissions % Screen Name Control Name Description 93 NC-View Reports Actual/Theoretical Cost Report Enables this report on the Inventory Reports menu. [141][296]

2 © 2023 CrunchTime! Information Systems, Inc. All Rights Reserved. | www.crunchtime.com Compare Actual vs Theoretical Costs What Are Actual Costs? Actual Costs are what your food costs are for a given period. Specifically, this is the total cost of all the products you actually used during a period of time, whether they were sold to guests or wasted. To figure out a product’s actual cost for a week, take the value of your beginning inventory, add the value of the products received through purchases and transfers, then subtract any transfers you sent out, and the ending (physical) inventory. That tells you what was actually used during the week. Example: Let’s say you have a Chicken Breast product you inventory which has a value of $2.00/lb. This shows how the Actual Quantity and Cost of the Chicken Breast used is calculated. Product: Chicken Breast Actual Quantity Actual Cost Beginning Inventory 130 lbs $260 Purchases  220 lbs $440 Transfers In  0 lbs $0 Transfers Out – 30 lbs $60 Ending (Physical) Inventory – 110 lbs $220 Actual Value 210 lbs $420 What Are Theoretical Costs? Theoretical Costs are what your food costs should have been for a given period. It’s the value of how much you theoretically should have used of each product, based on what was sold and rung in to your Point of Sale (POS) system by your Front of House staff. Net-Chef uses the following information to calculate your Theoretical Cost: • What was sold each day based on data from the POS (Menu Mix). • How much of each Component should be used to make 1 sold portion of each Recipe. • The per-unit value of each Component. Example: This shows the recipes and quantities that were sold, the quantity of Chicken Breast sold in each recipe, and the cost of the quantity that was sold. Again, the value is $2.00/lb. Recipes Sold / Chicken Breast Qty Recipe Qty Sold Chicken Breast Sold Theoretical Cost Chicken Soup – ½ lb Chicken per portion 60 Each 30 lbs $60 Chicken Caesar Salad – 1 lb per portion 50 Each 50 lbs $100 Chicken Sandwich – ½ lb per portion 240 Each 120 lbs $240 Theoretical Value 200 lbs $400 (Continued)

3 © 2023 CrunchTime! Information Systems, Inc. All Rights Reserved. | www.crunchtime.com Compare Actual vs Theoretical Costs (Continued) How is the Variance Calculated? The Variance is calculated as the difference between your Theoretical Cost and your Actual Cost. Product: Chicken Breast Quantity Cost Theoretical Value 200 lbs $400 Actual Value – 210 lbs $420 Variance Value - 10 lbs - $20 This means that your Actual Cost was $20 higher than it should have been. This money was lost probably due to over-portioning and waste, or possibly even theft.

4 © 2023 CrunchTime! Information Systems, Inc. All Rights Reserved. | www.crunchtime.com The Actual/Theoretical Cost Report How to Use the Actual/Theoretical Cost Report (Single-Location Report) Reviewing the Actual/Theoretical Cost report can help you lower your food costs, because it shows you what your costs are vs. what they should be, for any product. 1. Open the Reports menu. 2. Select Inventory. 3. Then select Actual/Theoretical Cost. (Continued) Net-Chef > Reports: Inventory > Actual/Theoretical Cost

5 © 2023 CrunchTime! Information Systems, Inc. All Rights Reserved. | www.crunchtime.com The Actual/Theoretical Cost Report (Continued) How to Use the Actual/Theoretical Cost Report (Continued) 1. Select the desired From Date and To Date. 2. Then select Retrieve. Tip: You can select multiple periods to see how your costs are trending over time; this can help you tell if any one week’s costs are much higher or lower than they should be. (Continued) Net-Chef > Reports: Inventory > Actual/Theoretical Cost

6 © 2023 CrunchTime! Information Systems, Inc. All Rights Reserved. | www.crunchtime.com The Actual/Theoretical Cost Report (Continued) How to Use the Actual/Theoretical Cost Report (Continued) • P&L Substructure – This column shows you the Profit & Loss statement categories that your corporate office has set up to track your costs. • GL Code/Description – This column divides the major categories on the left into finer categories, each with its own GL code. (Continued) Net-Chef > Reports: Inventory > Actual/Theoretical Cost

7 © 2023 CrunchTime! Information Systems, Inc. All Rights Reserved. | www.crunchtime.com The Actual/Theoretical Cost Report (Continued) How to Use the Actual/Theoretical Cost Report (Continued) The total rows show Cost of Goods Sold (COGS) for entire categories. • This row shows the total COGS for Food and Beverage items. • This row shows the total COGS for Bakery items. • This row shows the total COGS for Service Supply items. • This row shows the total COGS for your entire location. Tip: This is the only place in Net-Chef that you can see your costs displayed that way, which makes the report an excellent “at a glance” report card for your performance. Reminder: The COGS categories are defined in Enterprise Manager, so the ones you see above are just examples; you probably won’t see these exact COGS categories in your environment. (Continued) Net-Chef > Reports: Inventory > Actual/Theoretical Cost

8 © 2023 CrunchTime! Information Systems, Inc. All Rights Reserved. | www.crunchtime.com The Actual/Theoretical Cost Report (Continued) How to Use the Actual/Theoretical Cost Report (Continued) • Actual Value – This column shows what you actually used in each category. • Theoretical Value - This column shows what you should have used in each category. (Continued) Net-Chef > Reports: Inventory > Actual/Theoretical Cost

9 © 2023 CrunchTime! Information Systems, Inc. All Rights Reserved. | www.crunchtime.com The Actual/Theoretical Cost Report (Continued) How to Use the Actual/Theoretical Cost Report (Continued) • Actual % – This column shows your Actual costs as a percentage of sales in the category, or of all sales. For example, your food costs might be shown as 21% of Food Sales, or it might be 10% of Net Sales. • Theoretical % – This column shows your Theoretical costs as a percentage of sales in the category. This could be a percentage of Actual Sales or of Theoretical Sales. Setup: During set up, your corporate office will decide which measures to use for calculating both the Actual % and the Theoretical %. Tip: Many companies keep a close eye on cost percentages, and this report makes it really easy to see how you’re doing. (Continued) Net-Chef > Reports: Inventory > Actual/Theoretical Cost

10 © 2023 CrunchTime! Information Systems, Inc. All Rights Reserved. | www.crunchtime.com The Actual/Theoretical Cost Report (Continued) How to Use the Actual/Theoretical Cost Report (Continued) • Variance Value – This column shows the difference between what your costs actually were, and what they should have been. It is calculated as [ Theoretical Value – Actual Value ]. • Variance % – This column shows the Variance Value as a percentage of sales. Alert: Negative variances are in red, which mean your Actual Costs are higher than they should have been. (Continued) Net-Chef > Reports: Inventory > Actual/Theoretical Cost

11 © 2023 CrunchTime! Information Systems, Inc. All Rights Reserved. | www.crunchtime.com The Actual/Theoretical Cost Report (Continued) How to Use the Actual/Theoretical Cost Report (Continued) • Logged Waste Value – This column shows how much waste was recorded for each category. • Logged Waste % – This column shows the Logged Waste Value as a percentage of sales. (Continued) Net-Chef > Reports: Inventory > Actual/Theoretical Cost

12 © 2023 CrunchTime! Information Systems, Inc. All Rights Reserved. | www.crunchtime.com The Actual/Theoretical Cost Report (Continued) How to Use the Actual/Theoretical Cost Report (Continued) 1. Select one of the P&L Substructure links to see Product Cost details for that grouping. For example, selecting the Total COGS Food and Beverage link reveals cost details about those products. • Actual – These columns show what you actually used for each product. • Theoretical – These columns show what you should have used for each product. • Variance – These columns show the difference between what your costs actually were, and what they should have been for each product. Tip: We recommend you sort by the Variance Value column in Ascending Order; the negative variances will go to the top and the postive variances will go to the bottom. This makes it easier to see all of your shortages and overages together, and in order of severity. Setup Note: If you see a Theoretical Value of $0 for a product you know you used, be sure to double-check the components of the recipes that should include this product, as well as the Production Type and POS Decrement settings. Net-Chef > Reports: Inventory > Actual/Theoretical Cost > Total COGS F&B link

13 © 2023 CrunchTime! Information Systems, Inc. All Rights Reserved. | www.crunchtime.com The Actual/Theoretical Cost Report (Continued) How to Use the Actual/Theoretical Cost Report (Continued) 1. Select one of the Actual Value links to see Consumption details for that product. For example, select the Actual Value link for the Maple Bacon Slices. • This section shows the Date, Type, and Source/Destination for all transactions involving the product. • This section shows the Actual Value of your Purchasing, Prep, and Transfer transactions for the product. • This section shows the (Theroetical) Consumption Value of your products based on Sales, Inventory Adjustments, Inventory Variances and Prep Depletion. • This section summarizes the totals from Sections B & C. Benefit: Reviewing this information helps you pinpoint transactions that are costing more than expected and identify price/quantity discrepancies in purchasing and prep transactions that may need to be corrected. (Continued) Net-Chef > Reports: Inventory > Actual/Theoretical Cost > Total COGS F&B link

14 © 2023 CrunchTime! Information Systems, Inc. All Rights Reserved. | www.crunchtime.com The Actual/Theoretical Cost Report (Continued) How to Use the Actual/Theoretical Cost Report (Continued) 1. Select one of the Theroetical Value links to see Theroetical Cost details for that product . For example , select the Theroetical Value link for the Maple Bacon Slices . This view shows you all of the Recipes sold that contained this product. • Select one of the Product Name links to see the details for that recipe. • This section shows the basic information for that Recipe, such as the Name, Number, Category and the various units of measure. • This section shows the Recipe Components and the quantity of each needed to make it. Benefit: Reviewing this information can help you identify recipe configuration issues and determine whether you may have used too much or too little of your recipe components. Net-Chef > Reports: Inventory > Actual/Theoretical Cost > Total COGS F&B link