CCS Food Cost Management & Pricing 2 — Questions and Answers
Question 1: A restaurant's monthly food cost is $18,000 and total sales are $60,000. What is the food cost percentage?
- 25%
- 30% (Correct answer)
- 33%
- 20%
Correct answer: 30%
Food cost percentage = (food cost / total sales) × 100 = (18,000 / 60,000) × 100 = 30%.
Question 2: Which pricing strategy sets menu prices based on what competitors charge for similar items?
- Cost-plus pricing
- Value-based pricing
- Competitive pricing (Correct answer)
- Contribution margin pricing
Correct answer: Competitive pricing
Competitive pricing uses competitor prices as a benchmark to set menu item prices.
Question 3: A butcher receives a 20 lb primal cut for $80. After trimming, only 14 lbs are usable. What is the cost per usable pound?
- $4.00
- $5.71 (Correct answer)
- $6.25
- $4.80
Correct answer: $5.71
Cost per usable pound = $80 / 14 lbs = $5.71.
Question 4: In recipe costing, which factor accounts for the difference between the amount purchased and the amount actually used in the recipe?
- Selling price factor
- Yield percentage (Correct answer)
- Contribution margin
- Plate cost
Correct answer: Yield percentage
Yield percentage accounts for losses from trimming, cooking, and portioning, showing what portion of purchased food is actually usable.
Question 5: Which of the following best describes 'contribution margin' in menu pricing?
- The ratio of food cost to selling price
- The amount remaining after subtracting food cost from selling price (Correct answer)
- The total revenue generated by a menu item
- The fixed cost allocated per menu item
Correct 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.
Question 6: 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?
- $58.00
- $60.00 (Correct answer)
- $45.00
- $30.00
Correct answer: $60.00
Total cost = (50 × $0.60) + (10 × $3.00) = $30 + $30 = $60.00.
Question 7: Which method of inventory valuation assumes that the most recently purchased items are sold first?
- FIFO
- LIFO (Correct answer)
- Weighted average
- Specific identification
Correct answer: LIFO
LIFO (Last In, First Out) assumes the most recently purchased items are sold or used first.
CCS Food Cost Management & Pricing 2
A restaurant's monthly food cost is $18,000 and total sales are $60,000.
What is the food cost percentage?