What Is the Formula for Food Cost Percentage?

Food cost percentage shows how much of your food cost goes to buying ingredients. There are two ways to figure it out, and both are worth knowing.

For a single dish, the formula is ingredient cost divided by menu price, then multiplied by 100. If a chicken dinner costs you $5 in ingredients and sells for $20, your food cost is 25%.

For your whole restaurant over a week or month, use this one-

(Beginning inventory + purchases − ending inventory) ÷ food sales × 100

For example, if you started the month with $8,000 in food, bought $22,000 more, and ended with $7,000 on the shelf. That means you used $23,000. If your food sales were $75,000, your food cost is about 31%.

Most restaurants aim for 25% to 35%, depending on the concept. A steakhouse will run higher than a pasta place.

Check this number often, not just once. Ingredient prices move, and a dish that made money last spring might be losing it now. If your overall percentage creeps up, look at portion sizes, waste, and what you’re paying suppliers.