In pricing, the cost factor equals 100 divided by the desired food cost percentage. If the desired percentage is 34%, what is the cost factor?

In pricing, the cost factor equals 100 divided by the desired food cost percentage. If the desired percentage is 34%, what is the cost factor?

• A. 3.50
• B. 2.94
• C. 2.75
• D. 4.00

Answer: (B)

The cost factor is the multiplier you apply to the raw food cost to reach a target food cost percentage. It’s found by dividing 100 by the desired percentage (as a whole number). So for a 34% target, compute 100 ÷ 34 = 2.941176..., which rounds to 2.94. This multiplier, when applied to the item’s cost, yields a selling price that achieves about a 34% food cost (for example, $4.00 cost × 2.94 = $11.76, and $4.00 ÷ $11.76 ≈ 0.34). Therefore, 2.94 is the correct cost factor.

The cost factor is the multiplier you apply to the raw food cost to reach a target food cost percentage. It’s found by dividing 100 by the desired percentage (as a whole number). So for a 34% target, compute 100 ÷ 34 = 2.941176..., which rounds to 2.94. This multiplier, when applied to the item’s cost, yields a selling price that achieves about a 34% food cost (for example, $4.00 cost × 2.94 = $11.76, and $4.00 ÷ $11.76 ≈ 0.34). Therefore, 2.94 is the correct cost factor.