1. Determine the following menu items selling prices by using factor and prime cost methods.

Wens caf is selling lasagna and ribeye steaks and she wonder how much she should charge these items.

The food cost for lasagna is $2.50/portion, and ribeye steak is $5.50/portion.

Her cafs food cost percentage is 30%.

The labor cost associated with producing the lasagna and ribeye steak is $3.00 and $2.50 respectively.

Labor cost percentage is 30%.

How much should Wen price these two menu items by using factor and prime cost methods?

Why are the prices different when using different methods? Which one method do you think Wen should price her items on?