1. What is Food Cost Percentage?

Food cost percentage is the ratio of the cost of ingredients to the revenue generated from selling the food items. It's a key metric for restaurant profitability and menu pricing.

2. How Does the Calculator Work?

The calculator uses the food cost formula:

Where:

• \( ingredients \) — Total cost of all ingredients used
• \( sales \) — Total revenue from food sales

Explanation: The formula calculates what percentage of your sales revenue is spent on ingredients.

3. Importance of Food Cost Calculation

Details: Maintaining an optimal food cost percentage (typically 28-35%) is crucial for restaurant profitability. It helps in menu pricing, cost control, and identifying waste or theft.

4. Using the Calculator

Tips: Enter total ingredient costs and total sales in dollars. Both values must be positive numbers for accurate calculation.

5. Frequently Asked Questions (FAQ)

Q1: What is a good food cost percentage?
A: Most restaurants aim for 28-35%, but this varies by cuisine type. Fine dining may have higher food costs (35-40%) while fast food is often lower (25-30%).

Q2: How often should I calculate food cost?
A: Ideally weekly or monthly to track trends and catch problems early.

Q3: Does this include labor costs?
A: No, this calculation only considers ingredient costs versus sales.

Q4: How can I reduce my food cost percentage?
A: Strategies include negotiating with suppliers, reducing waste, portion control, and menu engineering.

Q5: Should I include beverages in this calculation?
A: Typically no - beverage costs are usually calculated separately as they often have different profit margins.