1. What is Food Cost Percentage?

Food Cost Percentage is a key metric in the restaurant and food service industry that measures the proportion of food sales revenue spent on food ingredients. It helps determine the profitability and efficiency of food operations.

2. How Does the Calculator Work?

The calculator uses the food cost percentage formula:

Where:

• Cost of Goods Sold — Total cost of food ingredients used
• Food Sales — Total revenue from food sales

Explanation: This formula calculates what percentage of your food sales revenue is being spent on the actual food ingredients.

3. Importance of Food Cost Calculation

Details: Monitoring food cost percentage is essential for maintaining profitability, setting menu prices, controlling inventory, and identifying potential waste or theft in food operations.

4. Using the Calculator

Tips: Enter the total cost of goods sold and total food sales in dollars. Both values must be positive numbers, with food sales greater than zero.

5. Frequently Asked Questions (FAQ)

Q1: What is a good food cost percentage?
A: Typically, 28-35% is considered good for most restaurants, though this varies by cuisine type and business model.

Q2: How often should I calculate food cost percentage?
A: Most restaurants calculate it weekly or monthly to track trends and make timely adjustments.

Q3: What costs are included in Cost of Goods Sold?
A: All direct food ingredient costs including meat, produce, dairy, spices, and other food items used in preparation.

Q4: How can I reduce my food cost percentage?
A: Strategies include better inventory management, reducing waste, negotiating with suppliers, and optimizing menu pricing.

Q5: Does this include labor costs?
A: No, food cost percentage only includes the cost of food ingredients. Labor, rent, and other overhead costs are separate calculations.