If the desired profit is 15%, what is the ideal total expense?

Prepare for the ManageFirst Controlling Foodservice Cost Test. Study with carefully designed flashcards and multiple-choice questions, complete with hints and explanations. Equip yourself for the exam!

Multiple Choice

If the desired profit is 15%, what is the ideal total expense?

Explanation:
To hit a 15% profit, expenses must be the remaining share of sales after subtracting profit. If profit is 15% of sales, then expenses equal 85% of sales (since 100% − 15% = 85%). The problem uses sales of $800,000. 85% of $800,000 is $680,000. So the ideal total expense is $680,000. Quick check: Profit = Sales − Expenses = 800,000 − 680,000 = 120,000. 120,000 is 15% of 800,000, confirming the result.

To hit a 15% profit, expenses must be the remaining share of sales after subtracting profit. If profit is 15% of sales, then expenses equal 85% of sales (since 100% − 15% = 85%).

The problem uses sales of $800,000. 85% of $800,000 is $680,000. So the ideal total expense is $680,000.

Quick check: Profit = Sales − Expenses = 800,000 − 680,000 = 120,000. 120,000 is 15% of 800,000, confirming the result.

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