Question 1

Which of the following is an example of an internal factor influencing decisions to change a menu?&#10;A) consumer demand&#10;B) menu mix&#10;C) supply levels&#10;D) competition

Accepted Answer

Menu mix, or the variety and balance of menu items, is an internal factor because it is determined by the restaurant itself. Decisions to change the menu mix may be driven by factors such as the need to appeal to different customer demographics or to align with the restaurant's overall branding strategy. Consumer demand, supply levels, and competition are all external factors that may influence menu decisions but are not determined by the restaurant itself.

Question 2

A chicken dinner has a standard food cost of $3.50. If a 30 percent food cost is desired, what would be the base selling price using the ingredients mark&#173;up method?&#10;A) $11.67&#10;B) $12.60&#10;C) $14.76&#10;D) cannot be determined

Accepted Answer

To find the base selling price with a desired food cost percentage of 30%, divide the standard food cost by the desired food cost percentage: $3.50 / 0.30 = $11.67.

Question 3

The operating budget at the Home Style Restaurant sets food costs at $500,000, all nonfood costs at $750,000, and requires a profit of $95,000. Using the ratio pricing method, what would be the base selling price for a menu item with a standard food cost of $3.00?

A) $5.07
B) $6.98
C) $7.25
D) $8.07

D

Accepted Answer

The ratio pricing method involves calculating the ratio of total costs (food and nonfood) to food costs, then applying this ratio to the standard food cost of the menu item. Total costs are $1,250,000 ($500,000 food + $750,000 nonfood), and the ratio is $1,250,000 / $500,000 = 2.5. The base selling price is $3.00 * 2.5 = $7.50. To achieve the required profit, the selling price must be adjusted to cover the profit margin. The total revenue needed is $1,345,000 ($1,250,000 costs + $95,000 profit), and the ratio becomes $1,345,000 / $500,000 = 2.69. Thus, the base selling price is $3.00 * 2.69 = $8.07.

Question 4

Menu engineering classifies menu items that are low in popularity and low in contribution margin as:&#10;A) puzzles.&#10;B) plowhorses.&#10;C) stars.&#10;D) dogs.

Accepted Answer

Menu engineering classifies menu items that are low in popularity and low in contribution margin as "dogs." These items are typically considered for removal or re-engineering to improve their performance.

Question 5

Annual planning at the Sporting Life Restaurant estimates nonfood costs at $220,000, sets required profit at $17,200, and projects that 58,000 guests will be served during the upcoming year. What would be the average contribution margin required per guest during the upcoming year?

A) $3.50
B) $3.75
C) $4.09
D) cannot be determined

Accepted Answer

The contribution margin per guest can be calculated using the following formula:

Contribution Margin per Guest = (Nonfood Costs + Required Profit) / Number of Guests

Substituting the given values:

Contribution Margin per Guest = ($220,000 + $17,200) / 58,000

Contribution Margin per Guest = $237,200 / 58,000

Contribution Margin per Guest = $4.09

Therefore, the average contribution margin required per guest during the upcoming year is $4.09, which is closest to option C, $4.09.

Question 6

Given the following information, what is the base selling price of the menu item using the prime costs pricing method? $\begin{array}{lr}\text { Menu Item Food Cost } & \$ 3,40 \\\text { Annual Labor Cost } & \$ 200,000 \\\text { Annual Number of Expected Guests } & 60,000 \\\text { Desired Prime Costs Percentage } & 63 \%\end{array}$

A) $5.29
B) $5.40
C) $8.43
D) $10.68

Accepted Answer

The answer of Given the following information, what is the...

Question 7

Service has been slow at the Season's Restaurant. The manager has traced the problem to the flow of products from the storeroom to production areas. Which of the following control points is likely to be the focus of corrective action?

A) preparing
B) serving
C) issuing
D) storing

Accepted Answer

Since the problem is related to the flow of products from the storeroom to production areas, the control point that is responsible for this flow is the issuing process. Therefore, corrective action should be focused on improving the issuing process to ensure that products are being transported in a timely and efficient manner to production areas.

Question 8

The corporate management team of a theme restaurant chain recently evaluated the chain's menu items and identified several puzzlesitems that are high in contribution margin but low in popularity. Which of the following would be a reasonable strategy for the management team to adopt in relation to these items?

A) Decrease prices.
B) Place the items in more visible locations on the menu.
C) Shift demand to these items by using suggestive selling techniques.
D) All of the above are reasonable strategies.

Accepted Answer

Each of the strategies listed aims to increase the popularity and sales of the high contribution margin items without sacrificing their profitability. Decreasing prices can make these items more attractive to customers, placing them in more visible locations on the menu can increase their noticeability, and using suggestive selling techniques can actively encourage customers to try these items.

Question 9

The food cost of a menu item is $3.85 and its labor cost per guest is $2.95. If the desired prime costs percentage is 60 percent, what would be the base selling price of the item using the prime costs pricing method?

A) $4.92
B) $6.42
C) $11.33
D) $17.00

Accepted Answer

The prime cost of the item is the sum of the food cost and the labor cost, which is $3.85 + $2.95 = $6.80. To find the base selling price with a desired prime cost percentage of 60%, divide the total prime cost by the desired percentage: $6.80 / 0.60 = $11.33.

Question 10

After analyzing menu items, the management team at the Sports Bar & Grill decided that they could increase the prices of several menu items, sell fewer of them, but increase overall revenues. The demand for these menu items would best be characterized as:

A) inelastic.
B) high.
C) elastic.
D) low.

Accepted Answer

If the management team believes that they can increase the prices of several menu items, sell fewer of them, but increase overall revenues, it suggests that the demand for these items is not very responsive to price changes. In other words, the demand is inelastic, meaning that customers are willing to pay a higher price for the item, even if it means buying fewer of them.

Deck 3: The Menu: the Foundation for Control