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What is a food cost percentage and how is it calculated?
To calculate your food cost percentage, first add the value of your beginning inventory and your purchases, and subtract the value of your ending inventory from the total. Finally, divide the result into your total food sales.
How do you calculate food cost from total sales?
Total Food Cost Percentage Formula
- Calculate your Total Cost of Goods Sold (CoGS).
- Calculate your Total Revenue for the time period you’re interested in examining.
- Divide Total CoGS by Total Revenue.
- Multiply your answer by 100 to reveal your Total Food Cost Percentage.
What is a good food cost percentage?
Restaurant owners typically set an ideal food cost percentage based on a number of factors, including their other expenses for labor and rent. Many restaurants aim to keep food costs between 28 and 35% of their revenue. This number can vary significantly based on a particular business’ needs.
What is the formula for food?
Food Cost Per Dish = Food Cost of Ingredients x Weekly Amount Sold. Total Sales Per Dish = Sales Price x Weekly Amount Sold.
How do you determine the selling price of a product?
To calculate your product selling price, use the formula:
- Selling price = cost price + profit margin.
- Average selling price = total revenue earned by a product ÷ number of products sold.
What is the profit margin for food?
When looking at the industry as a whole, the average restaurant profit margin is around 3-5% but can range widely from 0-15%. However, like many things in the restaurant industry, there is no cookie-cutter answer to what a “typical” restaurant profit margin should be for your business.
How to calculate the percentage of food sales?
Total food sales: the dollar value of your sales for the week, which you can find in your sales reports. To calculate your food cost percentage, first add the value of your beginning inventory and your purchases, and subtract the value of your ending inventory from the total.
How to calculate your ideal food cost percentage?
You can determine your ideal food cost percentage by dividing your total food costs for a set period of time by the total food sales for that same period. For example, if your total food costs are $3,000 and your total food sales are $8,800, then your ideal food cost is 0.34, or 34%.
How are food costs calculated in a restaurant?
Restaurant food costs are always presented as a percentage, and are calculated using a food cost percentage formula. This formula helps you understand the ratio of the cost of ingredients and revenue that these ingredients generate when the dish is sold.
What’s the percentage of food in a restaurant?
Food cost percentage is the value of food costs to revenue expressed as a percentage. The figure helps restaurants set menu prices. What is a good food cost percentage? To run a profitable restaurant, most owners and operators keep food costs between 28 and 35% of revenue.