Overhead and Profit

Overview of Lesson

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

 

Goal

Students will calculate the overhead and profit of a restaurant.

Objectives

• Students will utilize a formula to calculate the overhead and profit of a restaurant.

• Students will compare and contrast the difference in cost of items in a similar type of restaurant.

• Students will compare the costs of eating at different restaurants.

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 J:
Estimate the results of whole number computations using a variety of strategies, and judge the reasonableness.

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

Indicators:
Grade Three
Computation and Estimation
12. Add and subtract whole numbers with and without regrouping.

Grade Four
Meaning of Operations
7. Recognize that division may be used to solve different types of problem situations and interpret the meaning of remainders; e.g., situations involving measurement, money.

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.

13. Use a variety of methods and appropriate tools for computing with whole numbers; e.g., mental math, paper, pencil and calculator.

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

Mathematics
Number, Number Sense and Operations (Grade 6)

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:
Grade Six
Number and Number Systems
3. Explain why a number is referred to as being rational, and recognize that the expression can mean a parts of size each, a divided by b, or the ratio of a to b.

4. Describe what it means to find a specific percent of a number, using real-life examples.

Computation and Estimation
14. Use proportional reasoning, ratios and percents to represent problem situations and determine the reasonableness of solutions.

Materials

Online menus or any other menus from a local restaurant

Actual Cost of Food handout

Procedure

1. Have students choose a menu from which they would like to work. Students (or teachers) can find menus online by searching for online menus, or they may use a carryout menu from a local restaurant.

2. Explain to students how a restaurant determines the cost of a meal. For example: If a restaurant pays $2 to provide a dinner to a customer, the customer usually pays three times that amount, or $6, for the meal. The extra $4 pays for the overhead (rent, utilities, salaries, etc.) and for the profit (money that goes to the owner). Most restaurants use the following formula: The cost of the meal multiplied by 2 ($2 • 2 = $4) equals the cost of the meal and the overhead. The cost of the meal multiplied by 3 ($2 • 3 = $6) equals the cost of the meal, the overhead and the profit.

3. Have students compare the cost of similar meals (i.e. hamburger, french fries, salad and a drink) at three different restaurants (you may use the included student handout).

4. Have the students take the price of the meal from the three restaurants (remember, this is the actual price paid by the customer) and determine the cost, overhead and profit for each restaurant.

5. Challenge: Older students can find the percentage of money saved by comparing the costs of similar meals. Have the students write their results at the bottom of the handout.

Restaurant Menus Online

Use the resources on these two sites to find restaurant menus.

1. Restaurant Menus Online
   http://www.menu4u.com/
   This site allows the user to search by state (four states), city (13 cities) and region (five regions). Once you’ve chose from the three areas listed above you will be asked to choose by style of food. Some sites require a little extra searching to find the menu.

2. Lakes Region Online Menus
   http://www.weirsonline.com/onlinemenus.htm
   This site lists 20 links that go directly to the restaurants. From there you will be able to select a menu..

Evaluation

Rubric: Overhead and Profit