A Menu Item Costs a Manager $2

question 24

Multiple Choice

A menu item costs a manager $2.20 to produce. The manager wants to achieve a 40% food cost on the item. What should be this item's selling price?

• A) $4.50
• B) $5.00
• C) $5.50
• D) $6.00

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Definitions:

Purchasing Power

A currency's value measured by the volume of goods or services purchasable with one monetary unit.

Bank Account

A financial arrangement made with a banking institution where funds can be deposited for safekeeping, which can include various types such as savings, checking, and deposit accounts.

Nominal Interest Rate

The interest rate before adjustment for inflation, representing the face value of financial transactions.

Real Interest Rate

The interest rate that accounts for inflation, reflecting the actual cost of borrowing and the real return on savings.