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THE FUNDAMENTALS OF BREAK-EVEN ANALYSIS
Developing a Pricing Strategy based on Food Costing Analysis.

Number of questions:: 10
Type of questions:: multiple choice and fill in
Time allowed:: 20 minutes

Another Cyberchefs Electronic Union Web Resource Document


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__ Have you had any type of Food Cost training? (Required):

__Type of food service operation? (Required) :

__ Have you read the break-even material in the foodcost primer? (Required):


This quiz is based on the Break-Even Tutorial and Food Costing information found in the
Cyberchefs Electronic Union Web Resource document on Food Costing.
    The table below (Table 1) shows some operational information for "The Nighthawks Cafe and Grill", a small up scale restaurant which only serves dinner and does occasional catering-banquets for nearby office buildings. Although a small restaurant operation, "The Nighthawks Cafe and Grill" has been very successful and both the chef and the general manager feel that the operation is ready for some type of expansion. The chef and general manager agreed to have the accountant provide some numerical data that they can use to help them in their strategy and decision making. You will find that data below in Table 1.

TABLE 1
ITEM$ SELLING PRICE$ FOOD COST$ LABOR$ OTHER$ UNIT-VARIABLE COST$ FIXED COST
Appetizer7.751.861.78.193.831875.00
Main Course24.507.845.64.6814.161875.00
dessert6.001.381.38.142.901875.00
Beverage4.50.78.60.081.461875.00

THE EXAM

ANSWER THE QUESTIONS
and then "submit the form"


1. Unit Contribution is defined as ...:
fixed cost plus total variable cost for the Volume or level of Output
total revenue minus total variable cost
selling price minus unit variable cost
total revenue equals total cost
fixed cost divided by sales
fixed cost divided by total contribution
none of the answers are correct

2. The Break-Even point is where the Total Unit Contribution and Total Cost lines cross or meet on the graph. :
True
False

3. What is the beverage's unit contribution? ...:
$1.46
$3.04
$6.57
$13.68
20 percent
38 percent
50 percent

4. If the volume for dessert is 160 units per week what is its total weekly dollar contribution? ...:


5. How many Main Courses alone are needed to Break-Even? ... :


6. THE COMBINATION
of reliable and accurate data and, to measure your Numerical Data against is the combination you MUST have and use to make successful and competetive decisions.

7. If your sales mix is one each of the items in Table 1 to each customer, how many "sets" or covers must be sold to break-even?... :
92
82
77
108
none of the answers are correct

8. Based on the information provided in Table 1, which choice provides the greater "Total Contribution"... :
400 appetizers
160 main courses
545 desserts
550 beverages

9. The new appetizer is a gastronomic hit and a very profitable menu addition. Your manager has approached you for your opinion on an expansion idea ==> to build a small kitchen to wholesale the new appetizer to other restaurants and to a large grocery store chain. The total cost of the addition is estimated to be $120,000. Using the information provided in Table 1, how many of the appetizers must be sold to be able to break even after one year?


10. The lease has been renewed and has increased to $2160.00 per month. Unfortunately, the liquor license has been suspended for 4 months due to a repeated violation of the liquor sales laws. If your sales mix remains unchanged and you are selling one each of the remaining items in Table 1 to each customer, how many "sets" or covers must be sold each month during the 4 month liquor license suspension to break-even?
16
32
125
216
none of the answers are correct



If you are ready then ...


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