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HTF 100 (1)
noclue (1)
Chapter 3

Chapter 3 The Menu.docx

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Department
Hospitality/Tourism
Course
HTF 100
Professor
noclue
Semester
Winter

Description
Chapter 3 The Menu: The Foundation for Control Solutions to Problems in the Text Problem 1 1 1 Multiplier = desired food cost % = 0.375 = 2.67 (rounded) Base selling price = ingredient costs × multiplier $12.63 = $4.73 × 2.67 No – The answer in the earlier part of Problem 1 ($12.63) is the base selling price which is the starting point from which other factors should be assessed as the final selling price is determined. Problem 2 Base selling price = Prime ingredient cost × multiplier $23.59 = $6.34 × 3.72 Problem 3 a. Base selling price = average contribution margin/guest + Menu item ingredient cost = $790,000 + $4.85 161,580 $9.74 = $4.89 + $4.85 b. Step 1 – Determine the ratio of food costs to all other costs plus profit. All non-food costs + profit Food costs = ratio $710,000 + $80,000 = 1.35 $585,000 Step 2 – Calculate the amount of non-food costs and profit for the menu item. Required non-food costs + profit = ratio × ingredient cost $6.55 1.35 × $4.85 Step 3 – Determine the base selling price. Required non-food costs + profit + food cost = base selling price $6.55 + $4.85 = $11.40 c. Step 1 – Determine Labor cost/guest. Labor cost/guest = Labor costs = $426,250 = $2.64 (rounded) Number of guests 161,580 Step 2 – Determine prime cost/guest = Labor cost (from Step 1) $2.64 (Prime cost = food + beverage cost) Food cost $4.85 $7.49 Step 3 – Determine Base Selling Price. Price Base Selling Cost/Guest $7.49 = = = $10.19 price Prime cost 73.5 percentage* *Prime cost Labor cost Food cost = + percentage Revenue Revenue $426,250 $585,000 73.5% = + $1,375,000 $1,375,000 31.0% + 42.5% Problem 4 Base selling price = [Entrée cost + Plate cost× Mark-up multiplier $8.02 = [$2.12 + $1.70] × 2.1 Problem 5 a. 1 $403,580 ÷ $1,187,000 × $4.57 = Base selling price 1 × $4.57 = $13.44 0.34 b. Step 1 – Calculate prime ingredient mark-up multiplier. Revenue $1,187,000 Multiplier = Entrée costs = $274,434 = 4.33 (rounded) Step 2 – Calculate base selling price. Base selling price = Prime ingredient cost × Multiplier $13.51 = $3.12 × 4.33 c. Base selling price = [Entrée costs + Plate cost]× Multiplier* $13.44 = [$3.12 + $1.45] × 2.94 _1_ = 2.94 1 *Multiplier = Desired food cost = 1 0.34 % $403,580 ÷ $1,187,000 d. Step 1 – Determine the average contribution margin per guest. [Labor costs + Other non-food costs] + Average contribution margin = Profit] per guest Number of guests [$367,970 + $316,550] + $98,000] = $7.25 107,900 Step 2 – Determine the base selling price. Base selling price =Average contribution margin per guest + Total ingredient cost $11.82 = $7.25 + $4.57 e. Step 1 – Determine the ratio of food costs to all other costs plus profit. All non
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