Question

The current cost of food sold at the Wharf Restaurant is 35% of sales. If sales increase, the restaurant manager should generally expect an increase in:

A) Cost of food sold
B) Profit margin
C) Fixed costs
D) Variable costs

Answer 1

If sales increase, the restaurant manager should generally expect an increase in variable costs (D).

Step-by-step explanation:

The current cost of food sold at the Wharf Restaurant is 35% of sales. If sales increase, the restaurant manager should generally expect an increase in Variable costs (D).

Variable costs are costs that change in relation to the level of sales or production. As sales increase, the cost of purchasing and preparing food to be sold at the restaurant will also increase. Therefore, the restaurant manager should expect an increase in variable costs.