An order of potato skins is sold for $3.95. The individual items to prepare this order cost: $0.89 for the potato; $0.30 for cheese; $0.15 for sour cream; and $0.08 for bacon. An order of cheese fries is sold for $3.75. The items to prepare this order cost: $0.65 for the fries; $0.30 for cheese; and $0.35 for chili. How much more profitable are the potato skins per order?
The 1st thing that you need to do is add up all the costs to make each item.
Potato Skins $3.95
potato = $.89
cheese = $.30
Sour cream $.15
Bacon = $.08
Total =$1.42
Cheese fries $3.75
fries $.65
cheese $.30
chili $.35
Total $$1.30
Potato Skins $3.95
cost of goods -$1.42
profit $2.53
Cheese fries $3.75
cost of goods $1.30
profit $2.65
Sales price to profit
potato skins $3.95/$2.53 =64%
Cheese fries $3.75/$2.65 = 71%
Cheese fries are more profitable
So what is the anwser? 1:30 or 2:45
130
To determine the profitability of each item, we need to calculate the total cost and the revenue generated for each item.
For potato skins:
Total cost = Cost of potato + Cost of cheese + Cost of sour cream + Cost of bacon
Total cost = $0.89 + $0.30 + $0.15 + $0.08
Total cost = $1.42
Profit per order = Revenue per order - Total cost
Profit per order = $3.95 - $1.42
Profit per order = $2.53
For cheese fries:
Total cost = Cost of fries + Cost of cheese + Cost of chili
Total cost = $0.65 + $0.30 + $0.35
Total cost = $1.30
Profit per order = Revenue per order - Total cost
Profit per order = $3.75 - $1.30
Profit per order = $2.45
To find out how much more profitable the potato skins are per order, we can calculate the difference in profit per order.
Difference in profit per order = Profit per order of potato skins - Profit per order of cheese fries
Difference in profit per order = $2.53 - $2.45
Difference in profit per order = $0.08
Therefore, the potato skins are $0.08 more profitable per order compared to the cheese fries.