The Cost of Running a Restaurant

Overview of Lesson

This lesson looks at the costs of running a restaurant, Cyd’s Corner Café, and what the restaurant owner must sell to stay in business.

 

Goal

Students will gain an understanding of the costs involved in running a restaurant.

Objectives

• Students will calculate the fixed costs of operating Cyd’s Corner Café.

• Students will determine how many meals must be sold in order for a restaurant to either break even or make a profit.

Ohio Academic Content Standards

Mathematics
Number, Number Sense and Operations (Grades 3-4)

Benchmark A:
Use place value structure of the base-ten number system to read, write, represent and compare whole numbers and decimals.

Benchmark I:
Demonstrate fluency in multiplication facts with factors through 10 and corresponding divisions.

Benchmark K:
Analyze and solve multi-step problems involving addition, subtraction, multiplications and division of whole numbers.

Benchmark L:
Use a variety of methods and appropriate tools (mental math, paper and pencil, calculators) for computing with whole numbers.

Indicators:
Grade 3
Meaning of Operations
10. Explain and use relationships between operations, such as: a) relate additions and subtraction as inverse operations; b) relate multiplication and division as inverse operations; c) relate addition to multiplication (repeated addition); d) relate subtraction to division (repeated subtraction).

Computation and Estimation
12. Add and subtract whole numbers with and without regrouping.

14. Multiply and divide 2- and 3-digit numbers by a single-digit number, without remainders for division.

Grade 4
Computation and Estimation
12. Analyze and solve multi-step problems involving addition, subtraction, multiplication and division using an organized approach, and verify and interpret results with respect to the original problem.

14. Demonstrate fluency in adding and subtracting whole numbers and in multiplying and dividing whole numbers by 1- and 2-digit numbers and multiples of 10.

Mathematics
Number, Number Sense and Operations (Grade 5)

Benchmark B:
Compare, order and convert among fractions, decimals and percents.

Benchmark F:
Apply number system properties when performing computations.

Benchmark G:
Apply and explain the use of prime factorizations, common factors and common multiples in problem situations.

Benchmark I:
Use a variety of strategies including proportional reasoning to estimate, compute, solve and explain solutions to problems involving integers, fractions, decimals and percents.

Indicators:
Meaning of Operations
6. Represent and compare numbers less than 0 by extending the number line and using familiar applications; e.g., temperature, owing money.

7. Use commutative, associative, distributive, identity and inverse properties to simplify and perform computations.

8. Identify and use relationships between operations to solve problems.

Materials

• Copies of the handout

• Pencil

• Calculator (at the teacher’s discretion)

Procedure

Note: Give the students an explanation of what fixed costs means.

1. Hand out the Cyd’s Corner Café student worksheet.

2. Explain the concept of fixed costs (costs that stay the same over a period of time) to the students.

3. Explain that restaurants use a standard formula of charging three times the cost of a meal, which covers operating costs and enables them to make a profit.

4. Have the students complete the worksheet.

Evaluation

Use the worksheet results to evaluate student comprehension.

Answer Page: Cyd’s Corner Cafe

Question 1:

Rent = $600/30 = $20
Salaries = 2 employees at $50 = $100
Utilities = $15
Cost of food = 25 meals at $2 = $50
Money made from meals sold = 25 meals at $6 = $150

Total Costs
$20 + $100 + $15 + $50 = $185

$185 (total costs) - $150 (money made) = - $35
Cyd’s Corner Café lost $35

Question 2:

Rent = $600/30 = $20
Salaries = 2 employees at $50 = $100
Utilities = $15
Cost of food = 35 meals at $2 = $70
Money made from meals sold = 35 meals at $6 = $210

Total Costs
$20 + $100 + $15 + $70 = $205

$210 (money made) - $205 (total costs) = $5
Cyd’s Corner Café made $5

Question 3:

Rent = $600/30 = $20
Salaries = 2 employees at $50 = $100
Utilities = $15
Cost of food = 50 meals at $2 = $100
Money made from meals sold = 50 meals at $6 = $300

Total Costs
$20 + $100 + $15 + $100 = $235

$300 (money made) - $235 (total costs) = $65
Cyd’s Corner Café made $65

Challenge Question:

Cyd’s Corner Café would have to sell 54 hamburger meals to make a 24 percent profit for one day.