Chapter 12 — Quiz

Twenty-four questions. Answer key at the bottom in a collapsed block — do the whole quiz before you open it. Bellwether's dinner-entrée week is the reference data throughout: 330 units, $8,739.00 in entrée sales, $2,447.98 of ideal food cost, $6,291.02 of contribution margin, weighted CM $19.06, popularity threshold 14.0%.

Multiple choice

1. Contribution margin is:

  • a) menu price ÷ plate cost
  • b) menu price − plate cost
  • c) plate cost ÷ menu price
  • d) (menu price − plate cost) ÷ menu price

2. A dish sells for $32.00 with a plate cost of $9.60. Its contribution margin and food cost percentage are:

  • a) $22.40 and 30.0%
  • b) $9.60 and 30.0%
  • c) $22.40 and 70.0%
  • d) $22.40 and 33.3%

3. Menu mix percentage should be computed from:

  • a) sales dollars per item ÷ total category sales
  • b) units sold per item ÷ total category units
  • c) covers served ÷ seats available
  • d) contribution margin per item ÷ total contribution margin

4. A category has ten items. Under the conventional 70% rule, the popularity threshold is:

  • a) 10.0%
  • b) 7.0%
  • c) 14.0%
  • d) 3.5%

5. An item with high contribution margin and low popularity is a:

  • a) Star
  • b) Plowhorse
  • c) Puzzle
  • d) Dog

6. The Bellwether burger has a 24.3% food cost and a $15.90 contribution margin; the ember trout has a 37.1% food cost and a $17.60 contribution margin. Which statement is correct?

  • a) The burger is the better item because its food cost percentage is lower
  • b) The trout contributes $1.70 more per plate than the burger
  • c) The trout contributes more per plate but sells more often
  • d) The two items contribute the same amount because price and cost offset

7. The horizontal line of the menu-engineering matrix is:

  • a) the simple average of the items' contribution margins
  • b) the target food cost percentage
  • c) total contribution margin ÷ total units sold
  • d) the median contribution margin

8. Bellwether's weighted average contribution margin is $19.06. Where does that number come from?

  • a) $6,291.02 ÷ 330
  • b) $8,739.00 ÷ 330
  • c) $2,447.98 ÷ 330
  • d) ($20.48 + $20.91 + $20.05 + $17.60 + $15.90) ÷ 5

9. The default action for a Plowhorse is best described as:

  • a) cut it immediately
  • b) never discount it and protect its position
  • c) re-cost it, attach something to it, and reprice at a menu change
  • d) raise its price aggressively, since guests clearly want it

10. Discounting a Puzzle is usually the worst available move because:

  • a) Puzzles have low food cost percentages
  • b) a discount attacks the item's only strong feature, its margin
  • c) Puzzles are always seasonal items
  • d) it violates menu-pricing regulations in most jurisdictions

11. The Hearth Chicken takes 29.1% of Bellwether's entrée units. Its popularity index is:

  • a) 0.29
  • b) 1.45
  • c) 2.08
  • d) 0.70

12. Cutting the lowest item on the matrix and rerunning it will generally:

  • a) produce a menu with no items below the lines
  • b) raise the weighted average CM and push a different item below it
  • c) leave the remaining items' quadrants unchanged
  • d) lower the popularity threshold

13. The ember trout misses the 14.0% popularity threshold by:

  • a) 4.0 percentage points, or about 13 units a week
  • b) 0.4 percentage points, or about 1.2 units a week
  • c) 1.4 percentage points, or about 5 units a week
  • d) it does not miss it

14. Which of the following is not something the menu-engineering matrix can see?

  • a) an item's contribution margin
  • b) an item's share of units sold
  • c) the labor minutes an item consumes on the constrained station
  • d) the number of items in the category

15. Bellwether's five entrées produce $8,739 of the roughly $21,850 in weekly dinner sales. That means the matrix covers:

  • a) 100% of dinner revenue
  • b) 40.0% of dinner revenue
  • c) 69.5% of dinner revenue
  • d) 28.0% of dinner revenue

16. Adding $1.00 to all five Bellwether entrée prices changes the weighted average contribution margin by:

  • a) $0.20
  • b) $1.00
  • c) $0.31
  • d) it depends on the mix

17. The star/plowhorse/puzzle/dog framework is most commonly attributed to:

  • a) the Fair Labor Standards Act
  • b) Kasavana and Smith, early 1980s
  • c) the National Restaurant Association, 2005
  • d) the FDA Food Code

18. The 70% popularity threshold is best described as:

  • a) a peer-reviewed finding with strong empirical support
  • b) a federal requirement for menu reporting
  • c) an industry convention with thin empirical backing
  • d) a value computed from each restaurant's own break-even point

Short answer

19. In one sentence, explain why food cost percentage is the right number for measuring kitchen execution and the wrong number for comparing two dishes.

20. Bellwether's squash and grains has a 16.5% food cost and is the second-largest generator of contribution-margin dollars on the menu. Explain both facts in two sentences.

21. Two of Bellwether's five items cannot be confidently placed on the popularity axis from one week of data. Name them and say why.

22. State the correct order of operations for re-engineering an item, cheapest first, and name the step most operators skip.

23. Explain in two or three sentences how cross-utilization can make cutting a "Dog" raise the plate cost of the items you keep.

24. An operator adds a beverage-attachment assumption to the trout-versus-burger comparison and the answer reverses. What does that tell you about acting on a two-variable model?

Answer key **1. b)** menu price − plate cost. **2. a)** $32.00 − $9.60 = **$22.40** contribution margin; $9.60 ÷ $32.00 = **30.0%** food cost. **3. b)** units sold ÷ total category units. Dollars smuggle price into an axis meant to measure guest preference. **4. b)** Expected share is 1 ÷ 10 = 10.0%; the threshold is 0.70 × 10.0% = **7.0%**. **5. c)** Puzzle — it earns well and sells poorly. **6. b)** $17.60 − $15.90 = **$1.70** more per plate. (c) is wrong on the second clause: the burger sells more often, at 73 units to the trout's 45. **7. c)** Total contribution margin ÷ total units — the *weighted* average. Bellwether's simple average is $18.99; the weighted average is $19.06, and on a menu with a wider CM spread the gap can move items across the line. **8. a)** $6,291.02 ÷ 330 = $19.06. Option (b) is the average check per entrée; (c) is the average plate cost; (d) is the simple, unweighted average. **9. c)** A Plowhorse is popular and low-earning: re-cost it (invisible), attach to it (additive), then reprice at a menu change. Cutting a high-volume item is almost never right, and re-portioning your most-ordered dish is how a restaurant gets a reputation for shrinking. **10. b)** A Puzzle's margin is the only thing about it that is working. **11. b)** Expected share on five items is 20.0%; 29.1% ÷ 20.0% = **1.45**. **12. b)** Removing the worst item raises the average of what remains, so the bar rises for everyone still standing. The threshold also *rises*, because it is 0.70 ÷ n and n has fallen — so (d) is backward. **13. b)** 14.0% − 13.6% = 0.4 points; 14.0% of 330 units is 46.2, and the trout sold 45 — a gap of **1.2 units a week**. **14. c)** The matrix has no labor axis at all. This is its single largest blind spot on a busy Saturday, when the constrained station rather than the guest count is what limits the business. **15. b)** $8,739 ÷ $21,850 = **40.0%**. (The 69.5% figure is entrée *attachment* — 330 entrées across 475 covers — which is a different measurement.) **16. b)** Exactly **$1.00**. Every item's CM rises by a dollar, so the weighted average of those CMs rises by a dollar regardless of the mix. At 330 units a week that is $17,160 a year — more than three times the value of the largest plausible mix shift on this menu, which is the point §12.6 makes. **17. b)** Michael Kasavana and Donald Smith, early 1980s, adapting portfolio thinking to a restaurant menu. **18. c)** A convention. It is a reasonable one, but there is no body of evidence establishing 70% rather than 60% or 80% — and §12.2 showed that moving the threshold to 100% of average changes the recommendation for two of Bellwether's five items. **19.** Food cost percentage holds the menu constant and asks whether the kitchen executed, which is exactly what a control number should do — but comparing two dishes with it throws away the size of the price tag, and dollars, not percentages, are what pay the rent. **20.** Its plate cost is $3.95 against a $24.00 price, which is a 16.5% food cost — the best on the menu. And it sells 62 times a week, so 62 × $20.05 = **$1,243.10** a week of contribution margin, second only to the Hearth Chicken and ahead of both the $31 pork chop and the $28 trout. A $3.95 vegetable plate is the menu's second-biggest earner. **21.** The **ember trout** (13.6%, band roughly 9.8%–17.4%) and the **pork chop** (16.4%, band roughly 12.3%–20.5%). On 330 entrées each share carries about two points of sampling noise in each direction, and the 14.0% line sits inside both bands — so neither item is placed, it is merely measured. **22.** Fix the data → sell it → re-cost it → re-price it → re-portion it → replace or cut it. The skipped step is the first one: verifying that the cost cards are current and the POS item list is clean. A stale cost card makes the entire vertical axis fiction. **23.** One purchase order usually feeds several menu lines — a whole-bird program yields the entrée, plus stock, livers, wings, and fat for other dishes. Cutting a line does not remove a cost; it removes a *use*, so the survivors either buy the input separately at a worse price or watch a case fail to turn over and go to waste. The disciplined move is to cut one item at a time and re-cost the survivors afterward. **24.** That the model is only as good as the variables in it, and that a variable left out — here, beverage, which is 28% of Bellwether's plan and the best margin in the building — can be larger than the difference the model was measuring. Use the matrix to rank questions, not to hand down verdicts.