Revenue minus variable costs for a specific item, showing actual profit per sale. This is the key metric for menu engineering decisions.
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Contribution Margin
Revenue minus variable costs for a specific item, showing actual profit per sale. This is the key metric for menu engineering decisions.
Related terms
- Menu Profitability — Measuring the profit contribution of each menu item by comparing sales revenue against ingredient costs and required preparation labor.
- Prime Cost — The combined cost of food, beverage, and labor. For most restaurants, prime costs should stay between 55-65% of total revenue.
- Star Menu Item — High-popularity, high-profitability dishes that drive restaurant success. These high-margin winners should get prominent menu placement.