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A restaurant uses the ratio method of pricing. It has annual nonfood costs of $675,000 and desires a profit of $125,000. Last year the restaurant spent $367,000 on food costs. What will be the selling price of an item with food cost of $6.00?

Respuesta :

Based on the ratio pricing method, the selling price of an item with food cost of $6 would be $13.08.

What is the ratio pricing method?

The ratio pricing method is used to determine the price of menu items. It is calculated by adding non food costs to the desired profit and dividing the sum by food cost. This value is then multiplied by the standard food cost.

Ratio pricing method = [(non food cost + desired profit) / food cost] x standard food cost

= [($675,000 + $125,000) / $367,000] x $6 = $13.08

To learn more about profit, please check: https://brainly.com/question/26181966

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