Question

gracie owns sweet treat bakery and has made a new french vanilla swirl cake. she wants to use the prime cost method to figure out what the price of the cake should be. the labor cost is 4.00, the raw food cost is 3.15. the labor cost % is 30%, and the food cost % is 30. what should the selling price be?

Answer 1

To calculate the selling price of the French vanilla swirl cake using the prime cost method, add the labor cost and raw food cost, divide by the sum of the labor cost percentage and the food cost percentage, and multiply by 100.

Step-by-step explanation:

The prime cost method is a pricing strategy that calculates the selling price of a product based on the cost of labor and raw materials used to produce it. In this case, Gracie wants to use the prime cost method to determine the price of her French vanilla swirl cake. The labor cost is $4.00 and the raw food cost is $3.15. The labor cost percentage is 30% and the food cost percentage is also 30%. To calculate the selling price, we can follow these steps:

1. Calculate the total cost by adding the labor cost and raw food cost: $4.00 + $3.15 = $7.15
2. Divide the total cost by the sum of the labor cost percentage and the food cost percentage: $7.15 / (0.30 + 0.30) = $7.15 / 0.60 = $11.92
3. Multiply the result by 100 to get the selling price: $11.92 * 100 = $1192

Therefore, the selling price of the French vanilla swirl cake should be $11.92.