How to Calculate Food Cost In a Restaurant

If you are a restaurant owner, you might want to keep a check on the food cost in your restaurant. If food is sold at too low a price, you will end up ruining your investment. Similarly, if the cost being charged is too high, a lesser number of people will come to the restaurant.


  • 1

    Make a list of all the ingredients you use while preparing a particular recipe. Be thorough an include details such as the amount of cooking oil used, a spoonful of mayonnaise of a small amount of ketchup that was used in preparing the recipe. Include garnishing and seasoning ingredients as well.

  • 2

    Depending on the quantity of ingredients used, calculate each ingredient’s cost. For instance, if each onion costs 15 cents and you had to use 3 whole onions is preparing the recipe, the onion cost of the recipe will be 45 cents. Remember to take into account the delivery charges that you had to pay when the ingredients were delivered. Estimate a fair portion of the miscellaneous charges.

  • 3

    Sum up the individual ingredient and miscellaneous charges to come up with the ingredients cost of the dish that you plan to serve in your restaurant.

  • 4

    Calculate the percentage of food cost in each meal by dividing the food/ingredients cost of a recipe over the cost that you charge from customers for that particulars. For instance, if you spent $4 for ingredients in a certain meal and you are selling the same meal in $12, ingredients cost percentage of the dish will be about 33.33 percent.

  • 5

    Apart from food/ingredients costs, you will have to bear overhead costs such as rent of the restaurant building, taxes, labour, marketing etc. Determine the daily over head cost. For example, if you spend around $30,000 in terms of overhead costs, the daily over head cost will be $1,000. Now, make an estimate of the customers that come to your restaurant every day and divide the daily over head cost with the number of customers. For instance, the over head cost to run your restaurant is approximately $1,000 and on an average day, you serve about 200 meals, than the overhead cost per meal comes out the be $5.

  • 6

    Add up the food/ingredients cost and the overhead cost per meal to calculate the exact cost of a particular dish. Now vary prices of all the dishes served in your restaurant by calculating the exact cost of a give recipe. For example, if a recipe costs you $10 in total, selling it in $9 will mean going into loss. Similar, selling the same recipe in $25 will be a blunder because you will lose a lot of customers when they see very high prices.

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