Chapter 6, Question 1

Bill's Burger Barn Combo

Number Selling Total Food

Item Sold Item Cost Total Cost Price Sales Cost %
Hamburger 200 $1.50 $3.49
French Fries (large) 185 0.40 1.60
Soft Drink (16 oz.) 190 0.20 1.35
Total

Bill's Bacon Cheeseburger Combo

Number Selling Total Food

Item Sold Item Cost Total Cost Price Sales Cost %
Bacon Cheeseburger 160 $1.65 $4.29
Onion Rings 135 0.30 1.40
Soft Drink (16 oz.) 155 0.20 1.35
Total

Bill's Chicken Sandwich Combo

Number Selling Total Food

Item Sold Item Cost Total Cost Price Sales Cost %
Chicken Sandwich 75 $1.10 $3.15
French Fries (large) 75 0.40 1.60
Soft Drink (16 oz.) 75 0.20 1.35
Total

Should Bill continue with this pricing strategy?

Answer:

Chapter 6
Q1
Chapter 6, Question 2

Pricing Factor Table

Desired Product Cost Factor

18%
21%
22%
24%
26%
31%
32%
36%
37%
41%
42%
44%
46%

Chapter 6
Q2
Chapter 6, Question 3

Bess and David's Diner - Suburbs (Bess)

Desired Product Cost Percentage: 40%

Product Cost Percentage Method

Cost of Desired Product

Item Product Cost Percentage Selling Price
Chicken Breast Dinner $2.25
Seafood Platter 3.45
Steak Dinner 4.99
Turkey Sandwich 1.25
Pork Chop 2.45
Hamburger 1.50
Cheeseburger 1.75
Fries 0.45
Meat Loaf 1.25
Small Drink 0.35

Bess and David's Diner - Inner City (David)

Desired Product Cost Percentage: 42%

Factor Method

Cost of
Item Product Factor Selling Price
Chicken Breast Dinner $2.25
Seafood Platter 3.45
Steak Dinner 4.99
Turkey Sandwich 1.25
Pork Chop 2.45
Hamburger 1.50
Cheeseburger 1.75
Fries 0.45

Chapter 6
Q3
Meat Loaf 1.25
Small Drink 0.35

Chapter 6
Q3
Chapter 6, Question 4

Desired
Contribution
Item Product Cost Margin Selling Price
Salads
Dinner Salad $0.30
Macaroni Salad $0.55
Potato Salad $0.65
Carrot and Raisin Salad $0.40
Bavarian Salad $0.60

Entrees
Liver and Onions $2.50
Steak Patty $2.75
Meat Loaf $2.85
Chicken Fried Steak $2.10
Fried Catfish $2.35
Chicken Casserole $2.25
Turkey and Dressing $2.55

Desserts
Chocolate Cream Pie $0.75
Coconut Cream Pie $0.75
Pecan Pie $1.25
Chocolate Cake $0.60
Pudding $0.20
Jello $0.20
Carrot Cake $0.70

Drinks
Coffee $0.15
Tea $0.15
Soft Drink $0.15

Chapter 6
Q4
Chapter 6, Question 5

Buffet Product Usage (Sunday, June 1): Gabriel's Tex-Mex Restaurant

Beginning Ending Total Unit Total

Item Category Unit Amount Additions Amount Usage Cost Cost
Steak Fajitas A lb. 20 60 6 $4.50
Chicken Fajitas A lb. 15 70 10 4.00
Carne Asada A lb. 10 50 4 4.25
Cheese Enchiladas B lb. 2 80 15 2.00
Beef Enchiladas B lb. 3 60 10 2.50
Enchiladas Verde B lb. 1 70 8 2.00
Chili Rellenos B lb. 10 45 5 2.75
Tacos C each 0 150 20 0.30
Bean Chalupas C each 0 175 5 0.25
Tortilla Soup C gal. 2 10 4 0.30
Spanish Rice C lb. 5 70 12 0.20
Refried Beans C lb. 15 75 6 0.20
Sopapillas C each 25 200 30 0.15
Total Product Cost

Guests Served: 400 Desired Food Cost %: 40%

Total Product Cost: Desired Selling Price Based on Cost:
Cost Per Guest:

Revenues, June 1: Projected Revenues, June 8: Difference:

After completing this analysis, what should be Gabriel’s selling price? If he uses this new
selling price and he serves 625 guests next Sunday, June 8, will his total revenue
increase? If so, how much?
Chapter 6
Q Answer:
5
 After completing this analysis, what should be Gabriel’s selling price? If he uses this new
selling price and he serves 625 guests next Sunday, June 8, will his total revenue
increase? If so, how much?

Answer:

Chapter 6
Q5
Chapter 6, Question 6

Number Product Contribution Selling

Menu Item Sold Cost Margin Price Total Sales
Hunter's Chicken 2560 $3.50
Jambalaya 750 $11.75
Grilled Salmon 1200 $4.50
Beef Tenderloin 500 $16.50
Vegetarian Cheese Bake 1210 $2.75
Total

Average Selling Price

Did JoAnna achieve her desired average selling price per guest? Does she
need to change her prices?

Answer:

Chapter 6
Q6
Chapter 6, Question 7

Value Meal and Beverage

Number Selling Total Food

Item Sold Item Cost Total Cost Price Sales Cost %
Stir Fry Dish 75
Beverage
Total

Number of Beverages to Achieve Target Overall Product Cost Percentage

Number Selling Total Food
Item Sold Item Cost Total Cost Price Sales Cost %
Stir Fry Dish 75
Beverage
Total

Based on the information given, calculate the overall product cost percentage of the Value Meals
and beverages. Would you advise Ming to “go for it”? Why or why not?

Answer:

How many beverages must be sold in addition to the Value Meals if Ming is to achieve her target
food cost percentage goal? Is this number feasible?

Answer:

Chapter 6
Q7
Chapter 6
Q7
Chapter 6, Question 8

Number of Beer Wine Spirit Total Cost per

Guests Served Cost Cost Cost Cost Guest
June 07 250 $500 $400 $600
June 14 650 1,225 2,875 5.75
June 21 400 525 1,000 675
Total

a. What do you think should be Jackson’s “best estimate” of the cost, to the Club, of providing a 4-
hour hosted bar at weddings?

Answer:

b. If Jackson seeks to ensure a 20% beverage cost, what should be his selling price, per guest, for a
4-hour hosted bar?

Answer:

c. Would you recommend Jackson charge 1/2 of the amount in the answer in b. above for a 2-hour
hosted bar? Explain your answer.

Answer:

Chapter 6
Q8