A pizza restaurant has only six items on its menu. a. For each item, compute the

Question

A pizza restaurant has only six items on its menu.

a. For each item, compute the cost %, total standard cost, total standard revenue and total standard contribution.

b. Calculate the total standard cost percentage, the actual cost percentage and actual contribution for this month.  

Compare the actual cost percentage with the standard cost percentage.

If you were the manager would you be satisfied with these results?

Item Cost Price Cost % # Sold Standard Cost Totals Standard Revenue Standard Contribution 1 $4.50 $16.00 654 2 $3.80 $13.25 2,195 3 $3.50 $12.50 1,110 4 $2.80 $10.75 990 5 $4.25 $14.00 295 6 $3.25 $10.25 259 Total Total Standard Food Cost %: Costs Revenue Contribution Actual Results $21,396.00 $70,150.00 Actual % of Revenue

Compare the actual cost percentage with the standard cost percentage.

If you were the manager would you be satisfied with these results?

Explanation / Answer

actual cost percentage is higher compared to the standard cost percentage

If i a the manager i am not satisfied with the results, because actual contribution is less than standard contribution.

Item Cost Price Cost % # Sold Standard Cost Totals Standard Revenue Standard Contribution 1 $4.50 $16.00 28.13% 654 $2,943.00 $10,464.00 $7,521.00 2 $3.80 $13.25 28.68% 2,195 $8,341.00 $29,083.75 $20,742.75 3 $3.50 $12.50 28.00% 1,110 $3,885.00 $13,875.00 $9,990.00 4 $2.80 $10.75 26.05% 990 $2,772.00 $10,642.50 $7,870.50 5 $4.25 $14.00 30.36% 295 $1,253.75 $4,130.00 $2,876.25 6 $3.25 $10.25 31.71% 259 $841.75 $2,654.75 $1,813.00 Total $20,036.50 $70,850.00 $50,813.50 Total Standard Food Cost %: 28.28%

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