Kitchen Financial Management Flashcards

A restaurant has monthly fixed costs of $30,000 and a contribution margin of 60% of sales. What is the monthly break-even point in sales?

Answer: $50,000

Break-even sales = fixed costs ÷ contribution margin ratio, so $30,000 ÷ 0.60 = $50,000.

In menu engineering, an item with high popularity but low contribution margin is classified as a:

Answer: Plowhorse

Plowhorses sell well but contribute little profit per sale, so they are candidates for price or cost adjustments.

A case of 24 heads of lettuce costs $36, and each head yields enough for 6 salads. What is the lettuce cost per salad?

Answer: $0.25

Each head costs $1.50 ($36 ÷ 24) and yields 6 salads, so $1.50 ÷ 6 = $0.25 per salad.

Which practice most directly helps a chef control labor cost without cutting service quality?

Answer: Scheduling staff to match forecasted business volume

Forecast-based scheduling aligns staffing levels with expected covers, avoiding both overstaffing and service failures.

Weekly sales are $42,000 and total labor cost including benefits is $13,440. What is the labor cost percentage?

Answer: 32%

Labor cost percentage = labor cost ÷ sales, so $13,440 ÷ $42,000 = 32%.

What is the primary purpose of a par stock level for a kitchen ingredient?

Answer: To set the quantity needed on hand between deliveries to meet demand

Par levels define how much of an item should be kept on hand to cover usage until the next delivery, guiding ordering.

A P&L statement shows food sales of $100,000, food cost of $31,000, labor of $33,000, and other operating expenses of $26,000. What is the operating profit?

Answer: $10,000

Operating profit = $100,000 - $31,000 - $33,000 - $26,000 = $10,000.