Question

1. Using the food cost percent method, what should the sales price be for a dish with a food

cost of $4.55 and a food cost percent of 31%?
What should the sales price be if the restaurant wants to hit a food cost percent of 30%?
2. A restaurant budgets for overhead expenses of $430,000 and a profit of $65,000 based on
sales of $780,000. Using the overhead-contribution method, what is this restaurant's food
cost percent?
What should this restaurant charge for an entrée with a cost per portion of $3.97?
3. A cafeteria uses the prime cost method to price its food. The direct labor cost for the chicken entrée is $0.56 and the food cost per portion is $1.12. If the cafeteria's price
factor is 3.1, what is the sales price for the chicken?
4. A hotel uses the actual pricing method to price its casual restaurant food. The hotel
budgets the restaurant's variable cost at 34%, its fixed cost at 21%, and its profit at 3%. What is the sales price for an appetizer with a food cost of $1.46 and a direct labor
cost of $0.97?
5. A coffee shop needs to make a gross profit of $1.82 per beverage to meet its budget
goals. How much should the coffee shop charge for a cappuccino with a per portion cost
of $0.57?
б.A fast food chain employs the base-price method for its menus. If the chain operates with
a 41.3% food cost and it wants to sell all of its sandwiches for $3.99, what is the maximum
food cost per sandwich that the chef may have?
7. List four factors that impact a manager's ability to charge a premium for a product.
8. A very basic restaurant does not provide employee meals, use transfers, or permit steward sales. What is its food cost for a month that has no promotions or write-offs if the month's
opening inventory is valued at $3,310, its closing inventory is $4,170, and its purchases for the
month are $9,722?
9. A catering company records the following data regarding food cost for March: opening
inventory is $378; closing inventory is $144; purchases are $12,706; employee meals are $588; promotions are $831; and steward sales are $701. What is the food cost for this business in
March? (Assume no other variables impacting cost of food sold are in play.
10. A restaurant has $312,500 in sales for the first quarter of the year. Its food cost for the quarter is $98,750. What is the restaurant's food cost percent?
If the owner allows a variance of + or - 0.5% on its standard food cost percent of 32%, is the restaurant doing well in the first quarter or does the manager have a problem?
11. List three possible problems that may cause a food cost percent to be higher than the restaurant's standard.
List two possible problems that may cause a food cost percent to be lower than the
restaurant's standard.
12. A sever is stealing from a restaurant. In 50 to 100 words, explain how might a manager identify the problem and the server if the restaurant has a POS system?
In 50 to 100 words, explain how might the manager do this if the restaurant does not have a
POS system?

Answer 1

Question 1:

Final Answer:

- The sales price for a dish with a food cost of $4.55 and a food cost percent of 31% should be $14.68.

- To achieve a food cost percent of 30%, the sales price should be $15.17.

Step-by-step explanation:

- For the first scenario, calculate the sales price using the formula:
`\( \text{Sales Price} = \frac{\text{Food Cost}}{(1 - \text{Food Cost Percent})} \).`

- Substituting values,
`\( \text{Sales Price} = (4.55)/(0.69) = 14.68 \).`

- For the second scenario, determine the sales price for a target food cost percent of 30%:
-
`\( \text{Sales Price} = (4.55)/((1 - 0.30)) = 15.17 \).`

Question 2:

Final Answer:

- Using the overhead-contribution method, the restaurant's food cost percent is 52.95%.
- The restaurant should charge $9.25 for an entrée with a cost per portion of $3.97.

Step-by-step explanation:

- Calculate food cost percent:
`\( \text{Food Cost Percent} = \frac{\text{Cost of Goods Sold}}{\text{Net Sales}} * 100 \).`

- Substituting values,
`\( \text{Food Cost Percent} = (430,000 + 65,000)/(780,000) * 100 = 52.95\% \).`

- Determine the sales price for the entrée using the formula:
`\( \text{Sales Price} = \frac{\text{Cost per Portion}}{(1 - \text{Food Cost Percent})} \).`
- Substituting values,
`\( \text{Sales Price} = (3.97)/((1 - 0.5295)) = 9.25 \).`

Question 3:

Final Answer:

- The sales price for the chicken entrée is $4.48.

Step-by-step explanation:

- Use the prime cost method formula:
`\( \text{Sales Price} = \text{Food Cost per Portion} + (\text{Direct Labor Cost} * \text{Price Factor}) \).`
- Substituting values, \
`( \text{Sales Price} = 1.12 + (0.56 * 3.1) = 4.48 \).`

Question 4:

Final Answer:

- The sales price for the appetizer is $5.96.

Step-by-step explanation:

- Apply the actual pricing method formula: {Sales Price} = {Food Cost} + \{Direct Labor Cost} + {Fixed Cost} + {Profit}.

- Substituting values, {Sales Price} = 1.46 + 0.97 + (0.34
`*` (1.46 + 0.97)) + 0.03 = 5.96 ).

Question 5:

Final Answer:

- The coffee shop should charge $2.39 for a cappuccino.

Step-by-step explanation:

- To achieve a gross profit, use the formula: {Sales Price} = {Cost per Portion} + {Gross Profit per Portion} ).

- Substituting values, {Sales Price} = 0.57 + 1.82 = 2.39 ).

I apologize for the oversight. Let's complete the explanations for the remaining questions.

Question 6:

Final Answer:

- The maximum food cost per sandwich that the chef may have is $1.65.

Step-by-step explanation:

- Calculate the food cost per sandwich using the formula: {Food Cost per Sandwich} = {Menu Price}
`*` {Food Cost Percent} ).

- Substituting values, {Food Cost per Sandwich} = 3.99
`*` 0.413 = 1.65 ).

Question 7:

1. Factors that Impact a Manager's Ability to Charge a Premium:

- Brand reputation and perception.

- Unique selling propositions.

- Economic conditions.

- Market demand and competition.

Question 8:

Final Answer:

- The food cost for the month is $5,882.

Step-by-step explanation:

- Calculate the monthly food cost using the formula: {Food Cost} = {Opening Inventory} + {Purchases} - {Closing Inventory}).

- Substituting values, {Food Cost} = 3,310 + 9,722 - 4,170 = 5,882.

Question 9:

Final Answer:

- The food cost for the business in March is $10,675.

Step-by-step explanation:

- Calculate the food cost by considering opening inventory, purchases, employee meals, promotions, and steward sales: {Food Cost} = \{Opening Inventory} + {Purchases} - {Closing Inventory} + {Employee Meals} + {Promotions} - {Steward Sales}).

- Substituting values, {Food Cost} = 378 + 12,706 - 144 + 588 + 831 - 701 = 10,675.

Question 10:

Final Answer:

- The restaurant's food cost percent is 31.6%, and the variance from the standard is within an acceptable range.

Step-by-step explanation:

- Calculate the food cost percent:
`\( \text{Food Cost Percent} = \frac{\text{Food Cost}}{\text{Sales}} * 100 \).`

- Substituting values,
`\( \text{Food Cost Percent} = (98,750)/(312,500) * 100 = 31.6\% \).`

- The variance from the standard is within + or - 0.5%, indicating acceptable performance.

Question 11:

1. Possible Problems Causing a Higher Food Cost Percent:

- Wastage and spoilage.

- Theft or pilferage.

- Inefficient portion control.

2. Possible Problems Causing a Lower Food Cost Percent:

- Quality compromise in ingredients.

- Incorrect inventory valuation.

Question 12:

1. Identification of the Problem:

- With a POS system, the manager can track sales anomalies, voids, or excessive discounts associated with the server's transactions.

2. Identification without a POS System:

- Without a POS system, the manager may need to rely on surveillance footage, witness statements, or irregularities in cash handling to identify discrepancies. Implementing tighter inventory control measures can also help uncover potential issues.