How do I calculate food cost for a US menu item?
Food cost is the cost of the ingredients in one portion, divided by its menu price. It is calculated from the recipe card, at net weight, and expressed as a percentage. Below: the formula and a complete example with illustrative figures in US units.
Short answer
- List every ingredient at its net weight, exactly as it lands on the plate.
- Multiply each weight by its purchase price per unit, then add up all the lines.
- Add the technical loss from trimming, peeling and cooking, which you should measure in your own kitchen.
- Use the menu price before sales tax, because in most US states tax is added at the register on top of it.
- Food cost % = production cost ÷ menu price × 100. Set your own target by menu category and test the result against it.
A worked example: one portion of carbonara, in US units
Recipe card with net weights, purchase prices and plated cost
| Ingredient | Net weight | Purchase price | Plated cost |
|---|---|---|---|
| Spaghetti | 4 oz | $2.20/lb | $0.55 |
| Pancetta | 2 oz | $12.00/lb | $1.50 |
| Egg yolks (2) | 1.4 oz | $0.30 each | $0.60 |
| Pecorino Romano | 1 oz | $26.00/lb | $1.63 |
| Pepper, salt, oil | — | — | $0.20 |
| Final cost (incl. 5% technical loss) | 8.4 oz | — | $4.70 |
The calculation, step by step
The raw ingredients add up to $4.48. With 5% technical loss, the production cost of the portion is $4.70.
The menu price is $17.00. In most US states sales tax is added at the register, so $17.00 is the figure to use. Confirm the treatment for your state with your accountant.
Food cost = 4.70 ÷ 17.00 × 100 = 27.6%. That means $4.70 of every $17.00 goes on ingredients.
Watch the yield
Example: you buy beef tenderloin at $12.00 per pound, but after trimming only about 12.5 oz of each pound is usable. The real cost of the meat on the plate is $12.00 ÷ 0.78 = $15.38 per usable pound.
What US rules mean for food costing
- Sales tax is set by state and locality. Confirm with your accountant whether your menu prices include tax before you calculate food cost.
- Packaged foods must declare the nine major allergens under US labelling law. The recipe card is the record you use to check them for on-site dishes.
Common mistakes
- Dividing by a tax-inclusive price, which makes the result look lower than it is.
- Using the gross weight from the supplier invoice instead of the net weight on the plate.
- Forgetting the side, the sauce and the packaging, which add up quickly.
- Looking only at the percentage and ignoring how many dollars remain from each portion sold.
How 4restaurants.net helps
- Production cost is calculated from the recipe card, using your own weights.
- Net weights on the recipe card let trimming enter the cost correctly.
- Food cost shows for each dish, next to the reports by dish.