Frequently Asked Questions
1) What is contribution margin and how is it computed?
It is the difference between the selling price and total variable cost per unit. Variable cost includes food cost and other variable expenses linked to the dish.
2) How are categories like Star Plowhorse Puzzle and Dog determined?
They are based on profitability versus popularity. Profitability compares contribution margin to a threshold and popularity compares units sold to a threshold.
3) What is the popularity threshold factor?
It scales the average units per item. A factor of 0.70 means an item is popular if its units sold are at least seventy percent of the average.
4) Which profitability threshold should I use?
Average treats each item equally. Weighted reflects sales mix by using contribution margin per unit weighted by units sold. Choose the one that aligns with your analysis style.
5) Can I include packaging or promotional discounts in costs?
Yes. Enter them under other variable cost. Keep fixed costs separate because contribution margin focuses on variable components tied to each unit sold.
6) How do I export results?
Click Export Results to download a CSV built directly from the results table. You can open the file in spreadsheet software for further analysis.
7) Why does my item show a negative margin?
The price may be below variable cost or inputs are incorrect. Review food cost other variable cost and price. Consider recipe changes or pricing adjustments.
8) Does this tool handle taxes or service charges?
If taxes or charges vary per unit add them to other variable cost so the contribution margin reflects the net amount retained per sale.