Once menu item costs have been calculated, the selling prices can be quickly determined by using a cost multiplication factor (i.e., if a 33 percent food cost is desired, multiply the food cost by 3.3). To obtain the factor, use ths formula:
|Formula: Multiplication Factor
|100 divided by
|Food cost percentage
|Equals multiplication factor
The same multiplication factor does not apply to all menu items. There is, in some cases, a wide price gap between the costs of different recipes. The objective is to strike a balance in menu pricing by using a lower multiplication factor for some dishes and a higher one for others. For example, a soufflé may have a low food cost and the multiplication factor (markup) can be made higher to be more in line with the more costly items on the menu.