HTF552-Topic 4: Pricing the Menu

What is the first step in determining the selling price of an item on the menu?

• Divide the food cost by the desired food cost percentage

• Multiply the food cost by a certain factor

• Charge what the competitor charges

• Add all expense lines except food cost and subtract from gross profit

Which method accounts for all costs (except food) as well as profit, and divides all other expenses and profit equally among all customers?

• The Factor Method

• The TRA Method

• The Gross Markup Method

• The Markup on Cost Method

What is the advantage of the Ratio Method in determining the selling price?

• It divides all expenses and profit equally among all customers

• It is based on charging what the competitor charges

• It takes into account all expenses and profit

• It is easy to adapt to any changes in expenses

Which pricing theory takes into account the left most digit of a price to influence customer perception?

• Quick-service pricing

• Odd-cents price

• Theme and ethnic restaurant pricing

• Fine-dining pricing

What is the point after which a customer will no longer buy an item, known as?

• Selling point

• Value point

• Resistance point

• Price point

What does the product mix refer to in menu engineering?

• The step in determining new menu selling price

• The value associated with each menu item

• The different categories on the menu with assigned food costs

• The percentage food cost from an aggregate of all items sold

Why is menu precost important in determining new menu selling prices?

• It tells what is likely to occur to the food cost in the future

• It provides the value associated with each menu item

• It determines the point after which a customer will no longer buy an item

• It calculates the total expenses and profit for the menu

Which method is preferred by many operators as it forces them to look at the complete financial figure?

• The TRA Method

• The Factor Method

• The Gross Markup Method

• The Markup on Cost Method

What is the main focus of psychological pricing theories?

• To increase food costs

• To decrease selling prices

• To standardize menu items

• To influence customer perception through pricing structures

What must be covered by the selling price to achieve a profit according to the text?

• Only the food cost percentage

• Only the competitor's price

• All costs and profit

• Only the cost of the item