What is the food service term for the amount of money remaining from a sale after subtracting the sold itemâ s cost from its selling price?

1. Check

2 Food cost percentage

3 Contribution margin

4. Cost of food sold

The answer for this question is contribution margin or option 3 from the answer options or list.

Explanation:

In Business and Accounting, the contribution margin basically refers to the difference between the price of any product or service and the variable cost of production. Contribution margin for per unit of product or service also represents the additional profit of the firm or company based on its marginal variable cost or expense and the per unit product or service price. The aggregate or overall contribution margin signifies the ability of any firm or seller to cover all its fixed cost or expenses and accumulate overall or total profit in business. In this case, the the selling price of the food item or service represents its market price at which the consumers or buyers have purchased it and the sold item's cost denotes the variable cost of production. Hence, the difference the two phenomenon denotes the contribution margin in this case.