Set a menu price from a dish’s plate cost and your target food cost percentage.
Price = plate cost ÷ target food cost %.
Gross profit = price − plate cost.
A chicken sandwich costs $4.20 to plate. At a 30% food cost target, the price is $14.00 and each sale contributes $9.80 before labor and other costs.
Start from a costed recipe: every ingredient, by portion. Then use your target food cost to get a starting price.
The final price also depends on competitors, perceived value and how the dish sells. Use the result as a floor.
A salmon bowl costs $6.85 to plate, including rice, vegetables and sauce. At a 28% food cost target, the suggested price is $24.46, leaving $17.61 of gross profit per bowl. That is a 257% markup on plate cost.
The suggested price is plate cost divided by the target, so any error in plate cost grows by the same factor in the price. It leaves out labor, packaging and card fees, which matter more for dishes that take long to prepare or go out in takeout containers. What guests will pay and nearby menus still decide the final number.
A food cost target gives a starting price, but the dollars each dish leaves after its plate cost, often called contribution margin, decide what pays the rent. Menu engineering, a method from hospitality research, sorts dishes by that margin and by how often they sell.
| Dish | Plate cost | Price | Margin per plate | Sold | Group |
|---|---|---|---|---|---|
| Pasta primavera | $2.60 | $17.00 | $14.40 | 380 | Popular, high margin |
| Burger | $4.10 | $15.00 | $10.90 | 420 | Popular, low margin |
| Salmon | $7.20 | $26.00 | $18.80 | 140 | Unpopular, high margin |
| Steak salad | $6.90 | $19.00 | $12.10 | 60 | Unpopular, low margin |
The average margin across all 1,000 plates is $13.41. The pasta is the dish to protect. The burger sells well but earns less, so a small price rise or a cheaper side is worth testing. The salmon earns well but needs better placement or a server mention, and the steak salad is the first candidate to rework or drop.
Third-party delivery commissions and packaging change the math. Many restaurants set a separate delivery menu price. To find it, add packaging to plate cost, run the calculator, then divide the result by one minus the commission rate. At a fictional 20% commission, a $14.00 in-house price becomes $17.50 before packaging.
The ingredient cost of one portion.
Your own target, set from your costs, prices and history.
Yes, to price points that fit your menu.
No, labor is separate.
Work out the suggested price, choose a menu price near it, and divide plate cost by that price to see the real food cost. At a $6.85 plate cost, $23.95 gives about 28.6% and $24.95 gives about 27.5%.
Most menus mix targets: proteins often run a higher food cost percentage, while sides, pasta and drinks run lower. Aim for your target across the whole menu mix rather than on every plate.
Recost your top sellers whenever supplier prices move noticeably and review the full menu at least twice a year.
Test small moves on popular items first, and watch the sales count for a few weeks. A best seller with a low margin often has room.
More for the same job
Instead of adding up timesheets before you open the menu price calculator, let EZTime total employee hours. Book a demo to see it with your team.