What is the formula for Restaurant Contribution (RC)?

The formula for Restaurant Contribution (RC) is typically represented as the difference between total contributions generated by sales and the fixed costs associated with running the restaurant. This means that RC can be calculated by subtracting fixed costs from the contribution per unit (CP).

Understanding this formula is important because it highlights how much money a restaurant is able to contribute towards its fixed expenses after covering the variable costs. The higher the Restaurant Contribution, the more effectively the restaurant is covering its fixed costs, which may include rent, utilities, and salaries that do not fluctuate with sales volume. So, focusing on contribution per unit provides insight into operational efficiency and profitability, making it a valuable metric for restaurant management and decision-making.

In contrast, the other options do not effectively capture the specific focus on fixed costs versus contributions, making them less suitable for defining Restaurant Contribution in the context of restaurant financial analysis.