Food Cost Calculation: Profitability Through Precision
Accurate food cost calculation determines menu profitability. With precision measurement from https://escaliusa.com/, you calculate accurately. This guide covers food cost mastery.
Food Cost Formula
Food cost formula: (Ingredient cost / Selling price) × 100 = Food cost percentage. Target food cost percentage typically 25-35% depending on restaurant type. Calculate cost of each ingredient. Divide by recipe yield weight. Multiply by portion weight. Sum all ingredients. Divide by selling price. Percentage shows profitability.
Detailed Cost Calculation Example
| Ingredient | Portion Weight | Total Cost | Per Unit Cost | Portion Cost |
|---|---|---|---|---|
| Flour (1kg @ $3) | 250g per portion | $3 | $0.003/g | $0.75 |
| Butter (500g @ $6) | 75g per portion | $6 | $0.012/g | $0.90 |
| Sugar (1kg @ $2) | 100g per portion | $2 | $0.002/g | $0.20 |
| Eggs (dozen @ $4) | 50g per portion | $4 | $0.0067/g | $0.33 |
| TOTAL COST PER PORTION | – | – | – | $2.18 |
Profitability Analysis
If portion cost $2.18 and selling price $9.95, food cost = 21.9%. This indicates good profitability. Prices above 35% indicate profitability issues. Precision measurement ensures accurate cost calculation. Small measurement errors compound to significant profit loss. Investment in precision scales pays through accurate costing.
Menu Engineering
- High margin items – feature prominently on menu
- Lower margin items – support theme, limit description
- Balance offering – mix high and lower margin items
- Seasonal changes – adjust menu following ingredient costs
- Testing – calculate cost before menu inclusion
Waste Tracking for Accuracy
Account for recipe yield loss in cost calculation. Some ingredients have waste (bones, trim). Calculate actual yield after trimming. Butcher yield for meats typically 65-75%. Vegetable yield varies by type. Accurate yield calculation prevents underpricing. Track waste percentage over time. Identify waste reduction opportunities.
Conclusion
Accurate food cost calculation drives profitability. Precision scales enable accurate costing impossible with estimation.
