Contribution margin is selling price minus item cost — the cash each sale contributes toward rent, labour and profit. Menu engineering uses it in currency rather than as a percentage.
Currency matters here rather than percentage, because what pays the rent is cash, not a ratio. An item at 70% margin selling twice a week contributes less than one at 55% selling forty times.
Aggregated across a menu and weighted by units sold, contribution margin is the benchmark that separates a Star from a Plowhorse.
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