Calculate food cost for a period from inventory and purchases, and compare it with food sales.
Cost of food sold = beginning inventory + purchases − ending inventory.
Food cost % = cost of food sold ÷ food sales × 100.
A diner starts the month with $8,000 of food inventory, buys $22,000 and ends with $7,500. Cost of food sold is $22,500. Food sales were $72,000, so food cost is 31.25%.
Food cost percentage is one of the main numbers restaurants watch along with labor cost. Calculate it for the same period each time, usually weekly or monthly, from an actual count.
Targets vary widely by concept. Compare with your own history and plan.
A brewpub kitchen starts the month with $3,100 of food inventory, buys $11,850 and counts $3,650 at month end. Cost of food sold is $3,100 + $11,850 – $3,650 = $11,300.00. Food sales were $39,800, so food cost is 28.39%.
Food cost compares the cost of food used with food sales for the same period, so both counts need the same timing and the same cost basis. A month with an unusually large ending count looks cheap, and the next month gives the difference back. The percentage is wrong if beverage sales slip into food sales or if supplier credits are missing from purchases.
The calculator gives actual food cost from counts and invoices. Theoretical food cost is what the food should have cost if every plate matched its recipe: multiply each dish’s plate cost by the number sold and add them up.
| Measure | Dollars | Share of $72,000 food sales |
|---|---|---|
| Theoretical cost from recipes | $20,160 | 28.00% |
| Actual cost from the calculator | $22,500 | 31.25% |
| Gap | $2,340 | 3.25 points |
The gap is the money lost to waste, over-portioning, unrecorded comps or theft. Track it monthly. A gap that grows after a menu change points at the new dishes.
Discarded food is part of your cost of food sold. Under the FDA Food Code, which most states adopt in some form, ready-to-eat foods that need temperature control and are held more than 24 hours must be date marked and used within 7 days at 41°F or below. A kitchen that throws out expired prep every week will see it in food cost, and a food waste log shows exactly which items.
It depends on the concept; track your own trend.
Usually tracked separately as beverage cost.
Weekly or monthly, with an actual count.
Prices, waste, portioning, theft or menu mix.
Always at cost, the price you paid suppliers. Counting at menu price mixes your markup into the inventory values and makes the cost of food sold meaningless.
Items moved to the bar, such as citrus and garnishes, should be taken out of food purchases and added to beverage cost. Otherwise food cost is overstated and bar cost understated.
Track them separately as supplies or packaging. Adding them to food purchases makes food cost look worse than it is.
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EZTime tags hours by job, client and role and shows real-time labor costing on the schedule, so estimates can be checked against actual hours.