The Operating Budget at the Home Style Restaurant Sets Food

Multiple Choice

The operating budget at the Home Style Restaurant sets food costs at $500,000, all nonfood costs at $750,000, and requires a profit of $95,000. Using the ratio pricing method, what would be the base selling price for a menu item with a standard food cost of $3.00?

A) $5.07
B) $6.98
C) $7.25
D) $8.07