Calculating Food Cost Percentage

Calculating Food Costs

Calculating food cost on an item and menu level is time consuming and confusing. For this reason, many restaurant operators feel it’s better to focus on sales and growing their customer base. In some cases, there are restaurants bring in a lot of cash with little to no profit. This can lead to perceptions of theft or mismanagement of funds creating mistrust. If restaurant operators took the time to evaluate all costs, it may shine a light on deeper issues. There are many costs from purchases to rent to incorrect pricing of menu items. In this article, I’m only going to focus on food costs because it’s a great place to start and make sure the menu items sold are profitable.

Building Menu Items

Restaurant operators get food costs for the overall menu item created and see the costs of each item, recipe and sub recipe that contribute to the final plate costs. The first section of the menu item price defines the high level details and price.

menu costing

Building Menu Items

The next section is used to search food items with the average costs when buying the same item from multiple suppliers. We begin by arranging the plate and getting each of the cost. Search for an items and select the item to be used in the menu. The search can include sub recipes, recipes and food items. Each one will have a unit cost that can go out 3 decimal places, total cost arrived when the the quantity is multiplied by the unit cost, the cost percentage of each item and notes for the items entered.
food cost menu items

Crunching The Numbers

The final section will give you the costs and from here the restaurant operator can review the costs.

  • Food Cost: The cost of food listed above
  • Material Cost: The cost of materials used in the menu item
  • Total Cost: The total food cost and materials
  • Gross Profit: The theoretical profit earned on each menu item
  • Food Cost Percentage: The food cost % for the menu item
  • Material Cost Percentage: The material % for the menu item
  • Total Cost Percentage: The total % cost for this menu item
  • Gross Profit Percentage: The total theoretical profit % earned.