When managers utilize a food cost percentage approach to menu item pricing they are basing their prices

Question:

When managers utilize a food cost percentage approach to menu item pricing they are basing their prices on the idea that food cost should be

a. A predetermined percentage of selling price.

b. Less than 25%.

c. Equal to an item’s contribution margin.

d. Less than an item’s contribution margin.

Contribution Margin
Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...