This simply is not always the case. Consider the traditional steak and chicken example. When asked which of these two items they would prefer to sell, some operators will be quick to identify chicken since it will yield a lower food cost percentage. The hidden factor in this analysis however, is consideration of the difference between each item's selling price and its food cost. This monetary difference is termed contribution margin.
Contribution margin is the focus of menu engineering.
This margin represents the number of dollars gained as gross profit. When a portion of Chicken Hawaiian is sold, two dollars in gross profit is earned. New York Strip Steak, on the other hand, produces two and one-half dollars in gross profit with each sale. Since foodservice operators bank dollars and not percentages, New York Strip Steak should be considered the more desirable of the two to sell. Recent computer software, designed to analyze operations against contribution margin considerations, are often referred to generically as menu engineering.