A criticism of using the contribution margin method of menu analysis is that it tends to favor higher-priced menu items over lower-priced menu items.

Question

Quizplus · Accepted Answer

The contribution margin method focuses on the actual dollar amount each menu item contributes to overall profit, which often results in higher-priced items appearing more favorable because they typically have higher contribution margins, even if their percentage cost is the same or higher than lower-priced items.

A Criticism of Using the Contribution Margin Method of Menu