Designing an Activity-Based Costing Method for Food and Beverage Businesses: A Determination of Activities

Food and beverage companies generally use traditional cost calculation methods, but modern costing methods have emerged that allow these companies to calculate their costs more regularly. The current observational study looks to determine all department activities and transactions that occur in the process of designing an activity-based costing (ABC) system, which leverages a contemporary cost management approach. We propose cost center activities that can be used to calculate costs in a more realistic manner for food and beverage businesses. To determine activities in line with the ABC method, a first-class restaurant was chosen in Eskişehir, Turkey; there, the researcher made observations in each restaurant department, and activities and process steps were observed and noted in line with the ABC system. Additionally, the restaurant manager was interviewed. Subsequently, the obtained data were presented to, and approved by, the business manager. As a result of this work, five main activities were determined for food and beverage businesses: receipt of the order and service, food preparation, food preparation for the final product, preparation of the table and setups for the next operation, and purchasing.