Question

Problem 3 Price the menu items using the ingredient markup approach. The ingredient costs of a fish dinner are follows. Fish (main ingredient) Rolls Butter Salad with dressing Corn Beverage $3.00 .30 .05 .50 .25 .50 a) Assume a 33 % food cost is desired. What should be the price of a fish dinner? b) Assume a multiple of six; what is the target price of the fish dinner if the prime ingredient approach is used?

Answer 1

a) total cost of fish dinner = $4.6

Cost is 33^1/3 % of selling price

Selling price = Cost/33^1/3% = 4.6 x 3

= $13.8

b) Assuming multiplier of 6, Target price of dinner by prime ingredient approach = 6 x $3 = $18