Question

Yellow Rose Package	$29.95
White Rose Package	$39.95
Golden Rose Package	$49.95
The Golden Rose Packages
	Yellow Rose Package		White Rose Package		Golden Rose Package
	Item	Cost ($)	Item	Cost ($)	Item	Cost ($)
Appetizer	Minestrone	1.25	Onion Soup	1.70	Crab Cake	2.25
Entrée	Roast Chicken	2.25	Braised Beef Ribs	4.25	Filet Mignon	6.50
Side	Yellow Rice	0.25	Roasted Redskins	0.65	Duchesse Potatoes	0.75
Side	Steamed Broccoli	0.50	Bacon Green Beans	0.75	Béarnaise Asparagus	0.95
Bread	Dinner Rolls	1.00	Basil Loaf	1.25	French Loaf	1.55
Dessert	White Cake	0.75	Almond Torte	1.25	Poached Pears	1.85
Beverage	Coffee/Tea	1.25	Coffee/Tea	1.25	Coffee/ Tea/ House Wine	4.40
Per guest	Total Food Cost	?	Total Food Cost	?	Total Food Cost	?
Per guest	Contribution Margin		Contribution Margin		Contribution Margin
	?		?		?
Package	Number Sold	Total Food Cost ($)	Food Cost %	Total Package Contribution Margin ($)	Revenue ($)
Yellow Rose	350	?	?	?	?
White Rose	400	?	?	?	?
Golden Rose	700	?	?	?	?
Total		?	?	?	?
Please complete the boxes with question marks and the questions below
a. What was Larry’s weighted average per guest sale (check average)? Answer: b. What was Larry’s overall food cost percentage?   Answer: c. What was Larry’s weighted average per guest contribution margin? Answer: d. Assume you were asked to give input on pricing the menu? What is more important, gross margin or cost of the food? (or are they equally important?) Why? e. Are their too many options in the packages being offered?  Why or why not?  Why would a reception hall offer a variety of 'packages'?

Answer 1

	Yellow Rose Package	White Rose Package	Golden Rose Package
	Item	Cost ($)	Item	Cost ($)	Item	Cost ($)
Appetizer	Minestrone	1.25	Onion Soup	1.7	Crab Cake	2.25
Entrée	Roast Chicken	2.25	Braised Beef Ribs	4.25	Filet Mignon	6.5
Side	Yellow Rice	0.25	Roasted Redskins	0.65	Duchesse Potatoes	0.75
Side	Steamed Broccoli	0.5	Bacon Green Beans	0.75	Béarnaise Asparagus	0.95
Bread	Dinner Rolls	1	Basil Loaf	1.25	French Loaf	1.55
Dessert	White Cake	0.75	Almond Torte	1.25	Poached Pears	1.85
Beverage	Coffee/Tea	1.25	Coffee/Tea	1.25	Coffee/ Tea/ House Wine	4.4
Per guest	Total Food Cost	7.25	Total Food Cost	11.1	Total Food Cost	18.25
Per guest	Package Price	$29.95		$39.95		$49.95
Per guest	Contribution Margin	$22.70		$28.85		$31.70
	Contribution margin= (Package Price-total food cost)
			total food cost=per guest food cost*number sold	FOOD cost %=total food cost /total revenue	total package contribution marginRevenue- food cost	Revenue =Package price *Number sold
	Package	Number Sold	Total Food	Food Cost %	Total Package	Revenue ($)
	Cost ($)	Contribution Margin ($)
	Yellow Rose	350	2537.5	24%	$7,945.00	$10,482.50
	White Rose	400	4440	28%	$11,540.00	$15,980.00
	Golden Rose	700	12775	37%	$22,190.00	$34,965.00
	Total	1450	19752.5	32%	$41,675.00	$61,427.50
a. What was Larry’s weighted average per guest sale (check average)?
Answer -:	Weighted average per guest sale =total revenue from all package /total number of package sold
	$61427.50/1450=$42.3634
b. What was Larry’s overall food cost percentage?
Answer:	Overall fodd cost% = 32 % as per the given above table
	total food cost %= total food cost/total revenue	($19752.5/61427.50 )*100=32%
c. What was Larry’s weighted average per guest contribution margin?
Answer -:	Weighted average per guest contribution margin =total contribution from all package /total number of package sold
	$41675/1450=$28.74

Answer D -

Gross margin is more important than the cost because if gross margin is higher will serve the purpose

However cost and margin both are related, we should always try to reduce the cost and increase gross

margin, gross margin can be increased by increasing sales price or reducing per unit cost.

Answer to E

No there not many options in packages are given only 3 options are given. As there is only three options. Reception hall
offer variety of package to increase revenue, many people have different income and different expenditure habits. So giving
them a variety of options will help the customer to select the best option for them. As packages are made in such a was that
it can be sold easily based on the category of footfall at the reception.