Break-Even
What is a variable cost in a restaurant?
Direct answer
A restaurant variable cost changes with sales volume or activity. Common examples include food and beverage ingredients, some packaging, card processing fees, and marketplace commissions. The exact classification depends on how the cost behaves.
Key points
- Variable costs rise or fall with sales or operating activity.
- Rent is usually fixed, while ingredients and percentage-based commissions are typically variable.
- Labor and utilities can be mixed costs with both fixed and variable components.
What to do next
- 1List costs and identify the business activity that causes each one to change.
- 2Separate fixed, variable, and mixed portions using a consistent policy.
- 3Use variable cost percentage to calculate contribution margin and break-even sales.