1. What is Food Cost Percentage?

Food Cost Percentage is a key metric in the restaurant and food service industry that shows what percentage of your sales revenue is spent on food ingredients. It helps businesses understand their profitability and control costs.

2. How Does the Calculator Work?

The calculator uses the Food Cost Percentage formula:

Where:

• \( Food\ Cost \) — Total cost of food ingredients ($)
• \( Sales \) — Total revenue from food sales ($)

Explanation: The formula calculates what portion of your sales is spent on food ingredients, expressed as a percentage.

3. Importance of Food Cost Percentage

Details: Monitoring food cost percentage helps restaurant owners and managers maintain profitability, set menu prices appropriately, identify waste or theft, and make informed purchasing decisions.

4. Using the Calculator

Tips: Enter your total food cost and total sales in dollars. Both values must be positive numbers. The calculator will compute the percentage automatically.

5. Frequently Asked Questions (FAQ)

Q1: What is a good food cost percentage?
A: Typically 25-35% is considered good, but this varies by restaurant type. Fine dining may have higher percentages while fast food is usually lower.

Q2: How often should I calculate food cost percentage?
A: Most restaurants calculate it weekly or monthly to monitor trends and catch problems early.

Q3: Does this include labor costs?
A: No, this calculation only includes the cost of food ingredients. Labor cost is a separate calculation.

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

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