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Hospitality/Tourism
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HTF 100
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Chapter 3

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Hospitality/Tourism

HTF 100

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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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