Food Cost Calculator
Enter your inventory counts, purchases and food sales, or one dish's ingredient cost, to see your food cost percentage and menu price.
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Food cost percentage for a period
Value of food on hand at the start of the week or month.
Everything bought during the period.
Value counted at the end of the period.
Food revenue only, before sales tax; leave out drinks.
- Cost of food used (COGS)
- $23,000.00
- Gross profit on food
- $49,000.00
- Food cost per $1 of sales
- $0.32
How this was calculated
- Cost of food used = beginning inventory + purchases − ending inventory = $8,000.00 + $22,000.00 − $7,000.00 = $23,000.00.
- Food cost % = $23,000.00 ÷ $72,000.00 × 100 = 31.94%.
- Gross profit on food = $72,000.00 − $23,000.00 = $49,000.00.
Food cost and menu price for one dish
Optional.
- Food cost at current price
- 32.31%
- Gross profit per plate now
- $8.80
- Gross profit at target price
- $9.80
| Food cost | Menu price | Gross profit |
|---|---|---|
| 25% | $16.80 | $12.60 |
| 28% | $15.00 | $10.80 |
| 30% | $14.00 | $9.80 |
| 32% | $13.13 | $8.93 |
| 35% | $12.00 | $7.80 |
How this was calculated
- Food cost % = $4.20 ÷ $13.00 × 100 = 32.31%.
- Price for a 30% food cost = $4.20 ÷ 0.3 = $14.00.
- Gross profit per plate at that price = $14.00 − $4.20 = $9.80.
Educational, not business or tax advice. Food cost covers ingredients only, not labor, rent or waste you do not count in inventory.
How food cost percentage is calculated
Food cost percentage is the share of food sales that went to buy the food itself. This food cost calculator works it out two ways. For a week or month, it uses the same cost-of-goods-sold formula the IRS uses for any business that sells inventory: beginning inventory + purchases − ending inventory = cost of food used, then food cost % = cost of food used ÷ food sales × 100. For a single dish it divides the ingredient cost of one portion by the menu price, and turns a target percentage back into a price: menu price = ingredient cost ÷ target %.
Worked example
A café counts $8,000 of food on the shelves on the 1st, buys $22,000 during the month and counts $7,000 on the last day. It used $8,000 + $22,000 − $7,000 = $23,000 of food. Food sales for the month were $72,000, so the food cost is $23,000 ÷ $72,000 = 31.94%, and gross profit on food is $49,000.
One dish on its menu, a chicken bowl, uses $4.20 of ingredients and sells for $13. Its food cost is $4.20 ÷ $13 = 32.31%. To bring it to 30%, the price would have to be $4.20 ÷ 0.30 = $14.00, which earns $9.80 gross profit per bowl instead of $8.80.
Costing a plate
Ingredient cost per plate is the sum of every ingredient at the price you actually pay. Divide the case price by the case size, then multiply by the portion: a 10 lb case of chicken thighs at $32 costs $0.20 an ounce, so a 6 oz portion costs $1.20. Use the yield after trimming and cooking, not the raw weight, or every plate looks cheaper than it is. Include sauces, garnish, oil and the bread basket; small items add up across hundreds of covers.
Common mistakes
- Skipping the inventory count. Purchases ÷ sales is not food cost. A big delivery on the 30th makes the month look expensive and the next one look cheap; only the inventory adjustment fixes that.
- Mixing in drinks. Beverage and alcohol costs run at very different percentages. Track them separately, and use food sales only.
- Pricing once and forgetting. Ingredient prices move. Re-cost your top sellers when supplier prices change; the BLS Consumer Price Index for food at home and food away from home shows how fast grocery and menu prices are rising.
- Chasing a number blindly. A rule of thumb of roughly 30% is a starting point, not a law. A steak can run a high percentage and still earn more dollars per plate than a cheap pasta dish.
Sources: IRS Publication 334 (Tax Guide for Small Business), chapter on cost of goods sold; IRS Publication 538 (Accounting Periods and Methods), inventories; U.S. Bureau of Labor Statistics, Consumer Price Index food series.
Frequently asked questions
How do you calculate food cost percentage?
Food cost % = (beginning inventory + purchases − ending inventory) ÷ food sales × 100. For example, $23,000 of food used on $72,000 of food sales is a 31.94% food cost.
How do I price a menu item from its food cost?
Divide the ingredient cost by your target food cost as a decimal. A dish with $4.20 of ingredients priced for a 30% food cost sells for $4.20 ÷ 0.30 = $14.00.
What is a good food cost percentage?
A rule of thumb is around 30% of food sales, but it depends on the concept. What matters more is the gross profit in dollars each dish earns.
Should drinks be included in food cost?
No. Track beverage and alcohol costs separately against beverage sales, because their cost percentages are very different from food.
Why can't I just divide purchases by sales?
Purchases ignore what is still on the shelf. Without the beginning and ending inventory counts, a large delivery at month end makes one month look too expensive and the next too cheap.