Purpose – This research paper aims to examine whether using menu engineering (ME) together with activity‐based costing (ABC) for menu analysis gives new insights about true menu profitability. The traditional ME approach only uses food cost to determine the contribution margin of individual...

Purpose – This paper aims to demonstrate how activity‐based pricing can be applied in a restaurant setting by combining the use of price sensitivity measurement with activity‐based costing. Design/methodology/approach – Data are collected at a Hong Kong buffet restaurant, based on...