Product cost percentage and contribution margin methods

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Reference no: EM131635710

One criticism of both the product cost percentage and contribution margin methods used for determining menu prices is that both are based primarily on the cost of food (or beverages) and ignore the cost of labor. In many foodservice operations, however, the cost of labor equals or even exceeds the cost of food and beverages. Do you foresee the cost of labor playing an increasing role in the calculation of menu prices? Explain your answer.

Reference no: EM131635710

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