Food Cost Percentages

An individual operation's food cost percentage is usually determined by the budget. The chef is interested in this figure because it tells him or her whether the menu prices and the costs for each item are in line.

The food cost percentage of a menu item equals the raw food cost or portion cost divided by the menu price:

food cost percentage =

menu price You can use this figure in two ways:

1. If you know the menu price and want to see what your food cost should be in order to be within the budget, multiply the menu price by the percentage:

food cost = menu price x percentage

Example: Menu price is $6.75 and food cost percentage is 35%.

2. If you know the food cost and want to determine what the menu price should be at a particular percentage, divide the cost by the percentage:

food cost menu price =-

percentage

Example: Food cost is $1.60 and food cost percentage is 40%. $1.60 _ $1.60

Continue reading here: Yield Cost Analysis

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