How to Calculate Food Cost Per Portion (Step by Step)

Food cost is the part of your menu price that goes to ingredients. If you know it for each dish, you can see which items make money and which ones quietly lose it. The good news is you do not need accounting training to work it out. You need a recipe, the prices you pay for ingredients, and about ten minutes.

What you need before you start

Gather three things: the list of ingredients in one recipe, what you paid for each ingredient (and the pack size you bought it in), and how many portions the recipe makes. Use the same currency for everything.

Step 1: Work out the cost of each ingredient used

Ingredients are usually bought in packs, but a recipe uses only part of a pack. Start with the price per unit, then multiply by the amount the recipe uses.

For example, you buy a 5 lb pack of chicken breast for $18. That is $3.60 per pound. A burger recipe uses 1,500 g (about 3.31 lb), so the chicken costs about $11.90.

Do the same for every ingredient: buns, cheese, lettuce, sauce, and so on. Add them up to get the recipe total.

Step 2: Divide by the number of portions

If the recipe makes 10 burgers and the total ingredient cost is $15.00, each burger costs $1.50 in ingredients.

Step 3: Add packaging and other per-portion costs

Include things you pay for each serving, like the box, the wrapper, the napkin, or the cup. Say the box and wrapper cost $0.35 per burger. The total cost per portion is now $1.85.

Step 4: Calculate food cost percentage

Divide the cost per portion by the selling price, then multiply by 100.

If you sell the burger for $9.00, the food cost is $1.85 divided by $9.00, which is 20.6%. Many restaurants aim for a food cost somewhere around 28% to 35%, but the right target depends on your concept, your location, and your other costs. Treat that range as a rough guide, not a rule.

The same method works in any currency

The steps above work whether you pay in dollars, pounds, euros, rupees, or pesos. Only the numbers change. If you run a business in a country with a sales tax or VAT, remember that the tax is usually charged on top of your selling price and is not part of your food cost.

Make it easier with a calculator

Doing this for every dish, and updating it every time ingredient prices change, is the part most small businesses skip. Our free Food Cost Calculator does the math for you. Enter your ingredients and amounts, see the cost per portion and food cost percentage, then get the sheet sent to your email.

Try the Food Cost Calculator: https://pixelorid.biz.id/tools/food-cost-calculator

A note before you price anything

Food cost is one part of profit. It does not include rent, labor, utilities, or waste. Use it to compare dishes with each other, and use a full profit and loss statement, or an accountant, to decide your overall pricing.