# Food Cost Formula?

A typical food cost formula used by restaurants is Food Cost % = (Beginning Inventory + Purchases ? Ending Inventory) / Food Sales. To calculate a day?s food cost, you take your beginning inventory, what you have in the morning, and add your purchases of the day to that. Then, you subtract your ending inventory, what you have left over at the end of the day at closing. This will give you approximately what you actually used that day. Then, you take that number, and divide by the amount of food sales you have in dollars. The end figure is your food cost percentage. If it is 25% then that means you spent .25 for every dollar you earned in food.
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