Which formula reveals the percentage of food and beverage income spent on payroll?

Which formula reveals the percentage of food and beverage income spent on payroll?

• A. Payroll costs (divided by) food and beverage total income
• B. Payroll costs plus food costs
• C. Payroll costs times F&B income
• D. Payroll costs minus food costs

Answer: (A)

The main idea is measuring how much of a restaurant’s revenue goes to payroll. To get that percentage, take the total payroll costs and divide them by the total food and beverage income (sales). Multiply the result by 100 to express it as a percent. This ratio shows the share of revenue consumed by payroll, which helps gauge staffing efficiency and budgeting. Why this works: payroll is a cost that scales with sales, so dividing payroll by sales directly reveals what portion of every dollar earned goes to wages and related payroll expenses. The other operations don’t form a true percent of sales: adding costs, multiplying, or subtracting mix different measures and don’t express payroll as a share of revenue. Example: if payroll is 50,000 and F&B income is 250,000, the payroll percentage is (50,000 ÷ 250,000) × 100 = 20%. This helps you compare against targets or industry benchmarks and adjust staffing as needed.

The main idea is measuring how much of a restaurant’s revenue goes to payroll. To get that percentage, take the total payroll costs and divide them by the total food and beverage income (sales). Multiply the result by 100 to express it as a percent. This ratio shows the share of revenue consumed by payroll, which helps gauge staffing efficiency and budgeting.

Why this works: payroll is a cost that scales with sales, so dividing payroll by sales directly reveals what portion of every dollar earned goes to wages and related payroll expenses. The other operations don’t form a true percent of sales: adding costs, multiplying, or subtracting mix different measures and don’t express payroll as a share of revenue.

Example: if payroll is 50,000 and F&B income is 250,000, the payroll percentage is (50,000 ÷ 250,000) × 100 = 20%. This helps you compare against targets or industry benchmarks and adjust staffing as needed.