Food cost percentage = (beginning inventory + purchases − ending inventory) ÷ food sales × 100. Do it for the same period, usually a week or a month.
The monthly formula, step by step
- Beginning inventory: the dollar value of food on hand at the start of the period, which is last period's ending count.
- Add purchases: everything you bought for the kitchen in the period, from invoices.
- Subtract ending inventory: count everything on hand at the close and value it at cost.
- The result is cost of goods sold. Divide it by food sales for the same period.
Worked example: ($8,000 + $21,000 − $7,500) = $21,500 ÷ $70,000 food sales = 30.7%
The figures above are an illustration, not a benchmark for your restaurant.
Theoretical versus actual food cost
Theoretical food cost comes from your recipes: what every dish should cost at exact portions. Actual food cost comes from the formula above. The difference is variance, and variance is where the money leaks: over-portioning, waste, spoilage, theft, mis-rings and comps nobody logged.
Cost individual dishes with the food cost calculator, then compare the total to your actual figure.
Why the number drifts
- Supplier prices change and the menu price does not.
- Portions creep when the line is busy.
- Counts are late or skipped, so month-end is the first time anyone sees the problem.
Fixing it takes weekly numbers, not monthly ones
A monthly figure tells you last month was bad. A weekly one tells you which week and, tied to sales by item, which dish. Mise does that tracking for you, connected to your POS and vendor invoices.
See food-cost software →