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Q:

# How do you calculate food cost percentage?

A:

StarChefs explains that food cost percentage is figured by taking the total beginning inventory cost plus purchases minus the ending inventory costs; then dividing that number by food sales.

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Food cost percentage is generally figured on a weekly basis. If the formula returns an answer of 50 percent, then the restaurant spends 50 cents to purchase food for every dollar earned in sales. Restaurants can use a free online calculator to calculate food cost percentages. These calculators can break down the food cost per recipe or menu item. An acceptable percentage depends on the type of meal, such as breakfast, lunch or dinner, and the amount of additional expenses the restaurant must cover, such as overhead.

## Related Questions

• A:

The inventory turnover ratio is a formula that displays how many times inventory is replaced over a period of time by dividing cost of goods sold over average inventory. This ratio is used to identify the efficiency of inventory management within a company.

• A:

Accounting Tools from CPA Steven Bragg indicates that the gross cost of an item is the sum total of all costs involved in making or acquiring it. In contrast, the net cost is the gross cost minus financial gains derived from the production or acquisition of the item.