Rosa and Gabriel own two Mexican grills in a large city in Texas. Rosa has primary responsibility for the grill in the suburbs, and Gabriel has primary responsibility for the grill in the downtown area. The menu items and product costs are the same in both grills, but the market in the downtown area demands lower menu prices than that in the suburbs. So, Rosa has set her desired product cost percentage at 28%, and Gabriel’s desired product cost percentage is 32% since he can’t charge as much as Rosa. Rosa likes to use the product cost percentage method to price menu items, and Gabriel likes to use the factor method. Help both of them determine their selling prices.

Rosa and Gabriel’s Mexican Grill (Suburb-Rosa)

Desired Product Cost Percentage: 28%

Product Cost Percentage Method Steak Fajitas Chicken Fajitas Tacos Rosa and Gabriel’s Mexican Grill (Downt-o Gawbrniel )
Desired Product Cost Percentage: 32%
Factor Method Cost of a Item Product Factor | Selling Price Steak Fajitas $4.50 Chicken Fajitas 4.00 Cheese Enchiladas 2.00 Beef Enchiladas 2.50 oe Enchiladas Verde 2.00 ee Chili Rellenos 2:75 ee ee Tacos 0.30 oe Bean Chalupas 0.25 ee Tortilla Soup 0.30 oe