A standardized recipe costs $58.80 to produce and it yields 12 portions. The manager wants to achieve a $12.00 contribution margin when selling the item produced by the recipe. What should be the manager's selling price for the item?

Question

Quizplus · Accepted Answer

The cost per portion is $58.80 / 12 = $4.90. To achieve a $12.00 contribution margin, the selling price should be $4.90 (cost per portion) + $12.00 (desired contribution margin) = $16.90.

A Standardized Recipe Costs $58