1. Principles of Food, Beverage, and Labor Cost Controls, Ninth Edition

4.  A = Menu items  B = Number of menu item sold  C (Menu mix %) = B ÷ Total # of entrées sold  D (Food cost) = Standard cost of each item  E (Sales price) = Menu price of each item  F (Item CM) = E – D  G (Menu cost) = D · B  H (Menu revenues) = E · B

5.  I = Combined menu cost of all items  J = Combined menu revenues of all items  K (Food cost %) = I ÷ J  L (Menu CM) = F · B  M = Combined menu CM of all items  N = Total items sold  O (Average contribution margin) = M ÷ N

6.  P (Contribution margin rating) = If the item’s F > O, then the item is designated a high contribution margin rating; if the item’s F < O, it is designated a low contribution margin rating.  Q = (1 ÷ total number of menu items) · 0.7  R (Menu mix rating) = If the item’s C > Q, then the item is designated a high menu mix rating; if the item’s C < Q, then it is designated a low menu mix rating.  S = Menu item classification

8.  Stars: Profitable and popular; possible to increase their menu prices without affecting volume.  Dogs: Unprofitable and unpopular; remove from the menu unless there is a valid reason for continuing to sell them or profitability can somehow be increased.  Plowhorses: Unprofitable but popular; keep on menu but increase their contribution margins without decreasing volume.  Puzzles: Profitable but unpopular; keep on menu but increase their popularity. © John Wiley & Sons, Inc. 2009