| FORMULAS: |
| SELLING PRICE = COST / TARGETED PERCENTAGE |
| CONTRIBUTION MARGIN = SELLING PRICE - PRODUCT COST |
| Determine the selling price for these menu items: |
| Item | Cost of | Desired Product | Selling Price |
| | Product | Cost Percentage |
| Chicken Breast Dinner | $ 2.25 | 40% |
| Seafood Platter | $ 3.45 |
| Steak Dinner | $ 4.99 |
| Turkey Sandwich | $ 1.25 |
| Pork Chop | $ 2.45 |
| Hamburger | $ 1.50 |
| Determine the selling price for bottled wine using both methods: |
| Product Cost | Cost % | Selling Price |
| $ 6.00 | 25% |
| $ 9.00 | 25% |
| $ 18.00 | 25% |
| $ 26.00 | 25% |
| Product Cost | Contribution Margin | Selling Price |
| $ 6.00 | $ 14.00 |
| $ 9.00 | $ 16.00 |
| $ 18.00 | $ 18.00 |
| $ 26.00 | $ 20.00 |
| Bill's Burger Barn Combo |
| Item | Number | Item Cost | Total Cost | Selling | Total | Food Cost % |
| | Sold | | | Price | Sales |
| Hamburger | 200 | $1.50 | | $3.49 |
| French Fries (large) | 185 | 0.4 | | 1.6 |
| Soft Drink (16 oz.) | 190 | 0.2 | | 1.35 |
| Total |
| Bill's Bacon Cheeseburger Combo |
| Item | Number | Item Cost | Total Cost | Selling | Total | Food Cost % |
| | Sold | | | Price | Sales |
| Bacon Cheeseburger | 160 | $1.65 | | $4.29 |
| Onion Rings | 135 | 0.3 | | 1.4 |
| Soft Drink (16 oz.) | 155 | 0.2 | | 1.35 |
| Total |
| Bill's Chicken Sandwich Combo |
| Item | Number | Item Cost | Total Cost | Selling | Total | Food Cost % |
| | Sold | | | Price | Sales |
| Chicken Sandwich | 75 | $1.10 | | $3.15 |
| French Fries (large) | 75 | 0.4 | | 1.6 |
| Soft Drink (16 oz.) | 75 | 0.2 | | 1.35 |
| Total |
| Bill is dissatisfied with his high food cost percentage. He decides to incorporate price |
| blending into his pricing strategy in hopes of dropping his food cost % below 35%. |
| He has developed 3 combos and wants to find out if his food cost % is lower after the |
| first week of sales. Calculate his food cost % for each combo. |