How to Do Menu Costing

Save
Being a chef is not all knives and fire.
Being a chef is not all knives and fire. (Image: Monkey Business Images Ltd/Valueline/Getty Images)

Operating a successful restaurant is more than just creating and serving outstanding food. Young chefs are always a bit surprised to find that there is a lot of math involved. Luckily for them, most of the math is simple arithmetic and plugging numbers into formulas. However, numbers and specific factors that can change the overall data can vary from restaurant to restaurant. When performing menu costing, the chef must determine the price that will appear on the menu. This is calculated using two other pieces of information.

Things You'll Need

  • Accurate data on:
  • Food prices
  • Sales
  • Portion prices
  • Overhead and variable expenditures

Divide your total sales by the cost of all food item expenditures to get your food cost percentage (FCP). For example, $3,000 in sales divided by $1,000 in food cost would give you a 33 percent food cost. Most successful restaurants carry food cost at or near 30 percent.

Add the prices of each individual item in a dish to calculate portion cost (PC). For example, in a hamburger, your restaurant may spend 40 cents on a burger patty, 3 cents on lettuce, 3 cents on a slice of tomato, 2 cents on a bun, 1 cent on ketchup and 1 cent on mustard. This gives the burger a total portion cost of 50 cents.

Divide the PC by the FCP to determine the lowest possible menu price. For example, that 50 cent hamburger divided by a 33 percent food cost percentage means that the lowest possible menu price for it would be $1.52. This would be just to break even on the food cost. This does not take into account labor, overhead or other expenditures going into that plate.

Tips & Warnings

  • Only use this formula as a basic idea of menu costs; your restaurant will have its own added costs for the price of menu items.
  • Calculate all of this data with accurate information. Being off by just a few cents can be the difference between profitability and loss.

Related Searches

References

Promoted By Zergnet

Comments

You May Also Like

Related Searches

Check It Out

Are You Really Getting A Deal From Discount Stores?

M
Is DIY in your DNA? Become part of our maker community.
Submit Your Work!