Question

1. Victor, is also closely reviewing his pricing and has decided to calculate the cost of his famous “Heart Attack” burger, that features a half pound of freshly ground beef, two slices of cheese, three strips of bacon and a fried egg, plus all the fixings. The price is $8.00. Here is the detailed cost information:
   • Beef: $3.50 per pound
   • Cheese: $0.08 per slice
   • Bacon: $0.04 per strip
   • Egg: $0.90 per dozen
   • Bun: $0.20 per bun
   • Average other add-ons: $0.30 per burger (includes special sauce, lettuces, onions, etc.)

Using the above information, please calculate the following:

1. Total cost per burger: _______
2. CM per burger: _____
3. CM %: _________

Answer 1

Given price of the burger = $8

Beef used per burger = 0.5 pound

Rate of Beef = $3.50 per pound

So, cost of beef used = $1.75 per burger

Cost of cheese = 2*0.08 = $0.16 per burger

Cost of Bacon = 3*0.04 = $0.12 per burger

cost of egg = $0.90/12 = $0.075 per burger

cost of bun = $0.20

cost of other add-on = $0.30 per burger

So total cost of a Heart Attack burger = 1.75 + 0.16 + 0.12 + 0.075 + 0.20 + 0.30 = $2.605

So, total cost per burger = $2.605

Contribution margin per burger = price - cost = 8 - 2.605 = $5.395

Contribution margin in percent = CM/price = 5.395/8 = 67.44%