Elaine is the director of foodservice at a large retirement center, and she has asked Gerry, one of her managers, to investigate the Gabriel Hinojosa owns Gabriel's Tex-Mex Restaurant, an extremely popular, 250-seat establishment in a large California city. Gabriel has decided to offer a four-hour Sunday brunch buffet for his guests because he thinks he can achieve a guest count of 625 ( 21/2 turns). Last Sunday, June 1 , he offered the buffet for the first time, and he charged $12.00 per guest. However, he only served 400 people. He believes he could attract more guests if he offered the buffet at a lower price. He collected information on last Sunday's buffet product usage, and he used the ABC to put his menu items into categories. His desired food cost percentage is 40 percent. Help him complete the buffet product usage report. Buffet Product Usage (Sunday, June 1): Gabriel's Tex-Mex Restaurant 7a. After completing this analysis, what should be Gabriel's selling price? If he uses this new selling price and he serves 625 guests next Sunday, June 8, will his total revenue increase? If so, how much? Answer: 8. Jackson Daniels is the director of food and beverage at the Foxfire Country Club. In June, Jackson's club hosted three weddings. Each wedding featured a four-hour hosted bar paid for by the bride and groom. The consumption data from each event is listed below. Complete the missing data in the report, and then help Jackson answer the questions that follow: 8a. What do you think should be Jackson's "best estimate" of the cost to the Club of providing a four-hour hosted bar at weddings? 8b. If Jackson seeks to ensure a 20 percent beverage cost, what should be his selling price, per guest, for a four-hour hosted bar? 8c. Would you recommend Jackson charge half of the amount in the answer in b above for a two-hour hosted bar? Explain your answer. 9. Carlita operates a take-out only pizza parlor that specializes in four-cheese pizzas. Carlita offers four different pizza sizes and she knows what it costs to make each size. Help her calculate her food cost percentage and contribution margin for each size pizza. \begin{tabular}{|l|r|r|l|l|} \hline Pizza Size & Product Cost & Selling Price & Food Cost \% & Contribution Margin \\ \hline Small & $3.65 & $8.95 & & \\ \hline Medium & $4.70 & $11.95 & & \\ \hline Large & $5.75 & $14.95 & & \\ \hline Extra Large & $6.60 & $15.95 & & \\ \hline \end{tabular} One criticism of both the product cost percentage and contribution margin methods used for determining menu prices is that both are based primarily on the cost of food (or beverages) and ignore the cost of labor. In many foodservice operations, however, the cost of labor equals or even exceeds the cost of food and beverages. Do you foresee the cost of labor playing an increasing role in the calculation of menu prices? Explain your answer. Elaine is the director of foodservice at a large retirement center, and she has asked Gerry, one of her managers, to investigate the Gabriel Hinojosa owns Gabriel's Tex-Mex Restaurant, an extremely popular, 250-seat establishment in a large California city. Gabriel has decided to offer a four-hour Sunday brunch buffet for his guests because he thinks he can achieve a guest count of 625 ( 21/2 turns). Last Sunday, June 1 , he offered the buffet for the first time, and he charged $12.00 per guest. However, he only served 400 people. He believes he could attract more guests if he offered the buffet at a lower price. He collected information on last Sunday's buffet product usage, and he used the ABC to put his menu items into categories. His desired food cost percentage is 40 percent. Help him complete the buffet product usage report. Buffet Product Usage (Sunday, June 1): Gabriel's Tex-Mex Restaurant 7a. After completing this analysis, what should be Gabriel's selling price? If he uses this new selling price and he serves 625 guests next Sunday, June 8, will his total revenue increase? If so, how much? Answer: 8. Jackson Daniels is the director of food and beverage at the Foxfire Country Club. In June, Jackson's club hosted three weddings. Each wedding featured a four-hour hosted bar paid for by the bride and groom. The consumption data from each event is listed below. Complete the missing data in the report, and then help Jackson answer the questions that follow: 8a. What do you think should be Jackson's "best estimate" of the cost to the Club of providing a four-hour hosted bar at weddings? 8b. If Jackson seeks to ensure a 20 percent beverage cost, what should be his selling price, per guest, for a four-hour hosted bar? 8c. Would you recommend Jackson charge half of the amount in the answer in b above for a two-hour hosted bar? Explain your answer. 9. Carlita operates a take-out only pizza parlor that specializes in four-cheese pizzas. Carlita offers four different pizza sizes and she knows what it costs to make each size. Help her calculate her food cost percentage and contribution margin for each size pizza. \begin{tabular}{|l|r|r|l|l|} \hline Pizza Size & Product Cost & Selling Price & Food Cost \% & Contribution Margin \\ \hline Small & $3.65 & $8.95 & & \\ \hline Medium & $4.70 & $11.95 & & \\ \hline Large & $5.75 & $14.95 & & \\ \hline Extra Large & $6.60 & $15.95 & & \\ \hline \end{tabular} One criticism of both the product cost percentage and contribution margin methods used for determining menu prices is that both are based primarily on the cost of food (or beverages) and ignore the cost of labor. In many foodservice operations, however, the cost of labor equals or even exceeds the cost of food and beverages. Do you foresee the cost of labor playing an increasing role in the calculation of menu prices? Explain your