01Determine the Period of Analysis

  • Start by establishing the period of analysis for calculating food cost. It can be a week, a month, or any other time frame that suits your restaurant's needs.
  • Ensure that the period of analysis is consistent to get accurate and comparable results.

02Gather Purchasing Data

  • Collect all relevant purchasing data for the selected period. This includes invoices, receipts, and supplier records.
  • Ensure that you have detailed information about the quantity, price, and unit of measurement for each ingredient or product purchased.

03Calculate Total Cost of Goods Purchased

  • Add up the total cost of all goods purchased during the chosen period. This includes both food and beverage items.
  • Consider any additional costs such as delivery fees or taxes.

04Determine the Usage or Inventory Consumption

  • Determine the amount of each ingredient consumed during the analyzed period. This can be done through physical inventory counts.
  • Subtract the ending inventory from the beginning inventory to find the usage or consumption.
  • Ensure accurate measurement and recording of inventory to get precise results.

05Calculate Cost of Goods Sold (COGS)

  • Multiply the quantity of each ingredient used by its purchase cost to calculate the cost of goods sold (COGS) for each item.
  • Add up the COGS for all ingredients to get the total cost of goods sold during the period.

06Calculate Food Cost Percentage

  • To determine the food cost percentage, divide the total cost of goods sold by the total sales revenue for the chosen period.
  • Multiply the result by 100 to express it as a percentage.
  • The ideal food cost percentage varies depending on the type of restaurant, but it is generally around 25-35%.

07Analyze and Adjust

  • Analyze the calculated food cost percentage and compare it to industry benchmarks or your restaurant's target.
  • If the food cost percentage is higher than desired, evaluate areas of waste, portion sizes, menu prices, and supplier options.
  • Make necessary adjustments to improve profitability and efficiency.

Conclusion

Calculating food cost is a crucial aspect of restaurant management. By following the steps outlined in this article, you can accurately calculate food cost and optimize your menu pricing and purchasing decisions. Regular analysis and adjustments are necessary for maintaining profitability and ensuring efficient operations.

MethodsDetails
Step 1Determine the Period of Analysis
Step 2Gather Purchasing Data
Step 3Calculate Total Cost of Goods Purchased
Step 4Determine the Usage or Inventory Consumption
Step 5Calculate Cost of Goods Sold (COGS)
Step 6Calculate Food Cost Percentage
Step 7Analyze and Adjust
restaurant
food cost
calculating food cost
menu prices
purchasing decisions