Question: Ming has recently inherited the Quick Wok restaurant started by her parents. It is located in a busy strip shopping area surrounded by many office

Ming has recently inherited the Quick Wok restaurant started by her parents. It is located in a busy strip shopping area surrounded by many office complexes, but it is also near many QSRs. The Quick Wok has been successful because of the quality of its food, but Ming feels that it could do even better at lunchtime if she could create a Value Meal option to appeal to the priceconscious consumer. Because both a McDonald's and a Wendy's are within a quartermile of her store, she has determined that her own Value Meal menu item needs to be priced at $1.00. She creates a stirfry dish that, when served with white rice, has a portion cost of 65 cents. Her beverages have a cost of 20 cents. The beverages already sell for $1.00 each, and she does not want to raise this price.
She believes she could sell 75 of the new Value Meals per day if she offers the stirfry dish at $1.00. As well, she seeks an overall product cost percentage of 35 percent. From historical data she knows that 80 percent of her customers purchase a drink with their meals.
Based on the information given, calculate the overall product cost percentage of the Value Meals and beverages. Would you advise Ming to go for it? Why or why not?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related General Management Questions!