Food Cost Management & Pricing Flashcards

A restaurant's monthly food cost is $18,000 and total sales are $60,000. What is the food cost percentage?

Answer: 30%

Food cost percentage = (food cost / total sales) × 100 = (18,000 / 60,000) × 100 = 30%.

Which pricing strategy sets menu prices based on what competitors charge for similar items?

Answer: Competitive pricing

Competitive pricing uses competitor prices as a benchmark to set menu item prices.

A butcher receives a 20 lb primal cut for $80. After trimming, only 14 lbs are usable. What is the cost per usable pound?

Answer: $5.71

Cost per usable pound = $80 / 14 lbs = $5.71.

In recipe costing, which factor accounts for the difference between the amount purchased and the amount actually used in the recipe?

Answer: Yield percentage

Yield percentage accounts for losses from trimming, cooking, and portioning, showing what portion of purchased food is actually usable.

Which of the following best describes 'contribution margin' in menu pricing?

Answer: The amount remaining after subtracting food cost from selling price

Contribution margin is the selling price minus the food cost, representing what each item contributes to covering overhead and profit.

A kitchen uses 50 lbs of flour per week purchased at $0.60/lb, and 10 lbs of butter at $3.00/lb. What is the total weekly ingredient cost?

Answer: $60.00

Total cost = (50 × $0.60) + (10 × $3.00) = $30 + $30 = $60.00.

Which method of inventory valuation assumes that the most recently purchased items are sold first?

Answer: LIFO

LIFO (Last In, First Out) assumes the most recently purchased items are sold or used first.