Food and beverage cost as a percentage of sales is found by dividing the cost by the sales and converting to a percent. With costs at 280,000 and sales at 800,000, 280,000 ÷ 800,000 = 0.35, which equals 35%. Since 35% matches the given figures, that is the correct percentage. To see why the other options don’t fit: 30% would require 240,000 in costs, 40% would require 320,000, and 37% would require 296,000. The actual cost of 280,000 corresponds to 35%.

Quantity standards focus on the amounts of inputs used in producing goods or services, expressed in weight, count, or volume per unit of output. In practice, you set a standard for how much of an ingredient should be used for each serving—for example, a certain number of ounces of meat per sandwich or a specific cup of sauce per plate. Then you compare actual usage to these standards to calculate variances, which helps you spot over-portioning, waste, or theft and tighten cost control. Other types of standards cover different aspects, such as price standards (cost per unit of input), time standards (how long tasks should take), or staffing standards (how many employees are needed per shift). These do not directly measure the physical amount of materials used, which is why quantity standards are about weight, count, or volume.

Costs are grouped by how they respond to changes in sales. A cost that rises or falls in direct proportion to sales is a variable cost, because total variable cost moves with the level of activity. As you sell more units, you incur more cost; as you sell fewer, it decreases. This typically includes items directly tied to production and sales, like materials and direct labor, which scale with volume. Fixed costs stay the same across the relevant range, such as rent or a salaried supervisor, regardless of sales. Sunk costs are money already spent and not recoverable, so they don’t change with current or future sales. Marginal cost is the cost of producing one additional unit, a specific incremental cost rather than the overall behavior of all costs with changes in sales. So the cost described is variable cost.

Direct operating expenses are the costs tied to running the business and delivering service to guests in the ordinary course. Advertising fits this category because it directly supports attracting guests and generating sales in the current period. It’s an ongoing expense that helps keep the operation visible and competitive, rather than a one-time capital investment or a purely fixed overhead item. Insurance, in contrast, is a risk-management cost that protects the business but isn’t tied to daily guest service. Utilities are essential operating costs, but they’re usually categorized with other ongoing overhead rather than as marketing. Menus and wine lists are materials used in service and marketing but are typically handled as supplies or cost of goods rather than as advertising costs.