Contribution Margin
What a dish contributes in cash after its own food cost — not its cost percentage.
Contribution margin is the selling price of an item minus its food cost, expressed in currency rather than as a percentage. It matters because a low food-cost percentage on a cheap item can contribute less actual cash than a higher-percentage item that sells for more, and rent is paid in cash, not percentages. Menu engineering works by ranking items on contribution margin against popularity rather than on cost percentage alone.
Related terms
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