Certified Dietary Manager (CDM) Practice Exam

Which of the following statements is true regarding unit cost?

1. It is calculated as total servings divided by total cost

2. It is calculated as total cost divided by number of servings

3. It varies based on the market price of ingredients

4. It includes labor costs associated with production

The correct answer is: It is calculated as total cost divided by number of servings

The statement that unit cost is calculated as total cost divided by number of servings is accurate because unit cost represents the expense incurred to produce one serving of a product. By dividing the total cost of ingredients, labor, overhead, and other expenses by the total number of servings produced, a manager can determine how much each serving costs. This is essential for pricing, budgeting, and maintaining profitability in foodservice operations. While the other statements touch on related concepts, they do not correctly define unit cost. For example, calculating total servings divided by total cost would not yield a meaningful measurement of cost per serving. Similarly, while market prices can influence overall costs, unit cost itself is a fixed calculation based on current costs divided by servings. Finally, while labor costs can affect total costs, unit cost specifically refers to the cost per serving and may or may not include those labor costs, depending on what expenses are being considered.