Food cost per dish: how to work it out from the recipe
Most restaurants know their overall food cost. Fewer know what each dish costs. This guide shows how to work it out, what to check each month, and what to ask a POS vendor about stock.
Why the number matters
A dish that sells well can still lose money if its ingredients cost more than expected. Food cost per dish shows which dishes earn their place on the menu, which need a new price, and which need a smaller portion or a cheaper ingredient.
The method, in five steps
1. Write a standard recipe for every dish
List each ingredient with an exact quantity in grams, millilitres or pieces. Include the bread, the sauce and the garnish. A recipe that says "some rice" cannot be costed.
2. Use the latest purchase price for each ingredient
Take the unit price from your most recent supplier invoices, and convert it to the unit the recipe uses. Last year's price gives you last year's margin.
3. Allow for yield
Raw meat, fish and vegetables lose weight when they are trimmed and cooked. If 1 kg of raw chicken gives 700 g of usable meat, each usable gram costs about 1.4 times the purchase price per gram. Use the usable quantity in the recipe.
4. Add up the cost of one portion
Cost of one portion = the sum of quantity × unit cost for every ingredient in the recipe.
5. Work out the food cost percentage
Food cost % = cost of one portion ÷ selling price before sales tax × 100. Ask your accountant how tax applies to your menu prices, and use the same basis for every dish.
A worked example
The numbers below are illustrative. Use your own invoices and recipes.
- Chicken: 200 g at JD 3.00 per kg = JD 0.600
- Rice: 150 g at JD 1.00 per kg = JD 0.150
- Salad, sauce and bread: JD 0.200
- Cost of one portion: JD 0.950
- Selling price before sales tax: JD 5.00
- Food cost: 0.950 ÷ 5.00 = 19%
Check the gap every month
The cost from recipes is the theoretical cost. The actual cost is opening stock, plus purchases, minus closing stock. The gap between the two is waste, over-portioning, loss, or a recipe that no longer matches the plate. Compare them each month, ingredient by ingredient.
Ask every vendor
- Does stock go down by ingredient when a dish is sold, or only by the item sold?
- Can a recipe change without changing the menu, and can the change take effect from a set date?
- Does the system show theoretical and actual usage for each ingredient?
- Can it record waste, spoilage and staff meals?
- Can you export your recipes and stock history if you leave?
Ask us the same questions about AlienPOS
AlienPOS includes inventory, so you can see stock next to your sales. Whether it takes stock down by recipe is one of the questions to put to us. Ask it, and we will answer in writing.
This guide is general information, and its numbers are illustrative. Talk to us if you want a demo, or a written answer to any question in it.