Your operation sells a lot of cheeseburgers. Calculate the food cost given the following information: Ground beef: 6 oz portion (AP) purchased at $4.10 per lb.    Cheese: 1.5 oz purchased at $5.25 per lb.    Lettuce: 1 leaf (assume 20 leaves per head) purchased in a case of 24 heads at $27.50 per case.    Onion: 1 slice (onion yields 12 slices); 2.5 onions in a pound purchased at $1.74 per lb.    Bun: 1 bun in package of 18 purchased at $3.20 per package.     Tomato ketchup: 3 oz. average purchased in gallon container (128 oz.) packed 4 gal per case for $28.05.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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  1. Your operation sells a lot of cheeseburgers. Calculate the food cost given the following information:
    • Ground beef: 6 oz portion (AP) purchased at $4.10 per lb. 

 

  • Cheese: 1.5 oz purchased at $5.25 per lb. 

 

  • Lettuce: 1 leaf (assume 20 leaves per head) purchased in a case of 24 heads at $27.50 per case. 

 

  • Onion: 1 slice (onion yields 12 slices); 2.5 onions in a pound purchased at $1.74 per lb. 

 

  • Bun: 1 bun in package of 18 purchased at $3.20 per package.

 

 

  • Tomato ketchup: 3 oz. average purchased in gallon container (128 oz.) packed 4 gal per case for $28.05.
Expert Solution
Step 1

Ground Beef:

6 oz portion,

Cost per oz = $4.10 per lb = $4.10 / 16 = $0.25625 per oz.

Cost of Beef in burger = $0.25625 x 6 = $1.53750

 

Cheese:

1.5 oz ,

Cost per oz = $5.25 /16 = $ 0.328125 per oz.

Cost of cheese in burger = $0.328125 x 1.5 = $ 0.49219

 

Lettuce:

1 leaf,

Cost per heads = $27.50 per case /24 head = $ 1.145833 per head

Cost per leaf = $1.145833/20 = $ 0.05729 per leaf.

Cost of lettuce in burger = $0.05729

 

Onion:

1 slice,

Cost per onion = $1.74 / 2.5 onions = $ 0.696 per onion

Cost  per slice = $0.696/12 = $0.058 per slice.

Cost of onion in burger = $0.058

 

Bun:

1 bun,

Cost per bun = $3.20 for 18 pcs = 0.17778 per bun,

Cost of bun in burger = $0.17778

 

Tomato ketchup:

3 oz,

Cost per gal = $28.05 per case/4 gal = $7.0125 per gallon

Cost per oz = $7.012/128 oz = $0.05478 per oz.

Cost of Tomato ketchup in burger = $0.05478 x 3 = $0.16436

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