Food Cost meaning formula

What is food costing is there is any formula to calculate food costing.


There are no hidden secrets in food cost, it’s just simple mats :slight_smile:

First of you got to get the actual food cost ie the money you spend for the product you use.

And then you got your cost% everybody is talking about, the relation between money spend(purchasing) and money made(the Bill)

Cost divided by revenue gives you a cost%.

Target of cost % depends on your operation, concepts, location, guest profile and so on, usually set by the big boys touring budget meetings.

Run a few recipes trough and you will get the hang of it rather quickly. However it is easy to know your cost, the tricky part is to stay on top of it and to move it.

Unless you can control purchasing as well as sales you will not be able to control it.

Hope this helps


Hi @nyc_tube find below sample menu which also has a food cost calculation and breakup.

WHITE GRAVY.xls (34.5 KB)


Calculating Food Prices

  1. Find the cost of each item, I mean every single item.

Use this formula:
Purchase Cost + Portion

This is the portion cost:

Example: You buy 100 pounds of meat and it cost $1.50 per pound, your purchase cost would be $150

If you use a half pound of meat per portion in your meat, you take $150/200 (half divided by 100)to make a $0.75 per portion.

Add the cost together to total each dish

Meat = $0.75

Vegetables= $1.50

Condiments= $0.25

Total of = $2.50

Divide Food Cost by a Percentage
Most bars and restaurants have a food cost of around 30% to 35% of the total price.

$2.50 + 30% = $8.33
$2.50 + 35% = $7.14