NFA Foodservice Exit Practice Exam

Target food cost percentage means the cost to produce the entrée should represent that fraction of its selling price. To meet a 40% target with a $5 cost, set the selling price so that 40% of the price equals 5. So price = 5 ÷ 0.40 = 12.50, i.e., $12.50. This exactly makes the food cost 40% of sales. If you try other prices, you won’t hit that 40% target: for example, $12.00 would imply a 4.80 cost at 40%, and $13.50 would imply a 5.40 cost at 40%, both not matching the $5 cost. The $12.50 price is the one that aligns cost and target percentage.