Food Cost Management & Pricing Flashcards

A restaurant's monthly food sales are $95,000 and food cost is $31,350. What is the food cost percentage?

Answer: 33%

Food cost % = Food Cost ÷ Food Sales × 100 = $31,350 ÷ $95,000 × 100 = 33%.

Which technique involves reducing portion sizes while maintaining the same price to manage rising food costs?

Answer: Shrinkflation

Shrinkflation reduces portion sizes rather than raising prices, allowing operators to maintain margins without visible price increases.

In the Texas Restaurant Association's food cost formula, what does 'transfers out' refer to?

Answer: Ingredients moved from the kitchen to the bar or other departments

Transfers out are ingredients moved from food inventory to bar or other cost centers, reducing the food department's COGS.

What is a 'phantom recipe' and why is it problematic for food cost control?

Answer: An undocumented dish made by staff that consumes inventory without recorded sales

Phantom recipes are unofficial dishes staff create for themselves or give away, causing inventory shrinkage that inflates the apparent food cost percentage.

When conducting a 'should-cost' analysis, a manager compares actual food cost to what figure?

Answer: Theoretical food cost based on standardized recipe costs and sales mix

Should-cost (theoretical) analysis calculates what food cost ought to be based on recipes and actual sales volume, then compares it to actual spending to find variances.

Which menu engineering classification describes items with HIGH popularity but LOW profit margin?

Answer: Plow horses

Plow horses sell frequently but generate low contribution margins, so managers typically raise their prices or reduce portion costs to improve profitability.

A restaurant sells 400 burgers at $14 each and 200 salads at $12 each. What is the weighted average selling price?

Answer: $13.33

Weighted average = (400 × $14 + 200 × $12) ÷ 600 = ($5,600 + $2,400) ÷ 600 = $8,000 ÷ 600 = $13.33.