Question
Bottoms Up approach P5.12 A fast food restaurant uses a standard cost approach to aid in controlling its food cost. The Following are the standard
Bottoms Up approach
P5.12 A fast food restaurant uses a standard cost approach to aid in controlling its food cost. The
Following are the standard costs, selling prices and quantities sold of each of the five items
Featured on the menu during a particular week:
Item Cost Selling Price Quantity Sold
1 1.80 3.95 260
2 2.10 4.95 411
3 4.20 8.95 174
4 3.05 6.95 319
5 1.40 3.95 522
Total actual cost for the week was $3,804.10 and total actual sales revenue was $8,873.40.
Calculate total standard cost, total standard sales revenue and cost of sales percentages. Comment on the results.
- The following week, with no change in menu or standard costs and selling prices, there was a change in the sales mix. Although quantities sold of Items 2, 3 and 5 were virtually the same, many more of Item 4 and many less of Item 1 were sold. As a result of this, would you expect the overall standard cost percentage to increase or decrease? Explain your answer.
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