The owner of Snidley's Restaurant has developed a simple three-item menu for use in her establishment. Each menu item represents a complete meal. She has determined standard cost for each listed item and has kept careful records for the month of October. Given the information below, calculate potential savings as a percentage of sales for the month.
Menu Item Number Sold Portion Cost Sales Price
A 400 $2.00 $5.00
B 500 $3.00 $8.00
C 600 $4.00 $10.00
Actual cost for the month was $5,100, and sales were $12,000.

Question

Quizplus · Accepted Answer

To calculate potential savings as a percentage of sales, first determine the standard cost for the month and compare it to the actual cost. The standard cost is calculated by multiplying the number of items sold by the portion cost for each menu item: (400 * $2) + (500 * $3) + (600 * $4) = $800 + $1500 + $2400 = $4700. The actual cost is $5100, so the potential savings is $5100 - $4700 = $400. To find this as a percentage of sales, divide the potential savings by the total sales and multiply by 100: ($400 / $12000) * 100 = 3.3%.

The Owner of Snidley's Restaurant Has Developed a Simple Three-Item