Primarily on cost of food and ignore the cost of labor

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One criticism of both the Food Cost Percentage and Contribution Margin methods of determining menu price is that both are based primarily on the cost of “food,” and ignore the cost of labor. In many foodservice operations, however, the cost of labor equals or even exceeds the cost of food. Do you foresee the cost of labor playing an increasing role in the calculation of menu prices? Explain your answer.

Reference no: EM132108224

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