Food Cost Calculations

[megmvincent]

This is pretty simple, but the %s are tripping me up as to what numbers they relate to. As I get through figuring out the missing meat cost, then add to get total food cost I can’t seem to understand what amount that total is 26% of…and this get confused over figuring out the rest of the amounts due to my uncertainty with that calculation and how it affects figuring the remaining amounts.

 

[stapel]

This is pretty simple, but the %s are tripping me up as to what numbers they relate to.

The text in the first image is as follows (with numbering added for each of the questions):

Karis Elli owns Blazing Fast Subs. Ericka Braelon heads her highly trained staff. They produce custom-ordered subs for guests in less than two minutes. Karis forecasts that she will one sub sandwich to each of the 1,700 guests she estimates she will serve in the coming week. Karis uses the CM method of pricing. (a) Based on the revenue and cost forecast she has put together in the following spreadsheet, help Karis fill in the information needed to determine her forecasted CM per guest for the coming week. Assume that Karis' revenue and cost forecast assumptions are correct. (b) What will be per profit margin percentage? (c) What will be her CM per guest? Assume that Karis creates a new "Scottish"-style sub featuring Ruby Red smoked salmon and that it costs her $3.90 to make one. (d) At what price should Karis sell the new "Scottish"-style sub?

Does "CM" stand for "contribution margin"?

As I get through figuring out the missing meat cost, then add to get total food cost I can’t seem to understand what amount that total is 26% of…and this get confused over figuring out the rest of the amounts due to my uncertainty with that calculation and how it affects figuring the remaining amounts.

Might this value be related to the discussion leading to the chart at the top of page 210?