Food Cost Management & Pricing Flashcards

A restaurant wants a 28% food cost. If an entrée costs $8.40 to produce, what should its menu price be?

Answer: $30.00

Menu price = food cost / food cost % = $8.40 / 0.28 = $30.00.

Which type of menu analysis classifies items by both popularity and profitability?

Answer: Menu engineering

Menu engineering evaluates each menu item on two dimensions—popularity (number sold) and profitability (contribution margin).

When performing a standardized recipe cost analysis, why is it important to include a 'miscellaneous' or 'spice factor'?

Answer: To cover small-cost items like salt, pepper, and garnishes that are impractical to measure individually

A miscellaneous or spice factor (typically 3–5% of total recipe cost) covers minor ingredients too small to cost individually.

A pastry shop produces 240 croissants from a batch that costs $120 in ingredients. If 12 are discarded due to quality issues, what is the actual cost per sellable croissant?

Answer: $0.52

Sellable units = 240 − 12 = 228; cost per unit = $120 / 228 ≈ $0.526, rounded to $0.52.

Which of the following best represents a 'fixed cost' in a foodservice operation?

Answer: Monthly lease payment for the restaurant space

Fixed costs remain constant regardless of sales volume; a monthly lease is the same whether the restaurant is busy or slow.

In the context of purchasing, what does 'economic order quantity' (EOQ) help a foodservice operator determine?

Answer: The optimal order size that minimizes total ordering and holding costs

EOQ calculates the order quantity that balances the cost of placing orders against the cost of holding inventory.

A soup recipe yields 2 gallons and costs $16 to produce. If each serving is 8 oz, what is the food cost per serving?

Answer: $0.50

2 gallons = 256 oz; servings = 256 / 8 = 32; cost per serving = $16 / 32 = $0.50.