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How to Calculate Food Cost For A Recipe

 Estimating the cost of food plays a vital role in assessing the profitability of your restaurant. You need to calculate the price for food before including it into the menu to decide its estimated cost and elevate whether it costs you profit or loss. This consists of the cost of ingredients and time taken for its preparation, which are included in the price per item. This article will share some tips about calculating food cost for a recipe, which will help you understand the actual cause for formulating the margin of profit. It will ensure that the dish will provide profit for your restaurant. This process is also called plate costing, which could also be learned by browsing into a related website, and one needs to know the basics for doing so.

How to Calculate Food Cost for a Recipe

Follow these necessary steps to calculate your costs with ease.

You need to start by listing out all the ingredients of the recipe in one place and determining each component’s cost. Once you are done with it, sum them up and list how many grams of each you would need of it. Lastly, divide each gram with the ingredient’s total cost, and you will get the result. This will make you know the estimated value of the dish per plate. Make sure to use measurements of your choices to divide the cost to find the actual meal cost.

Now it’s time to decide the food’s ideal cost, which must be 28-35% of the menu price. The overhead costs. But this is just the cost of the actual meal, and the rest must go to the overhead cost. It should include server, utility, and cook expenses along with it. In food calculation, one needs to count lots of other restaurant costs to balance over income.

Calculating overhead

Tracking the cost of your plate can effectively help in changing the future of the restaurant. You can shift to the wholesale market to cut out the value of the ingredients. Once you estimate the need for a month’s elements, you can buy them from wholesale at much lower prices. 

The costs keep fluctuating and may rise in the future, so you need to keep the right track of it. In case the prices come down, it will be a great help in the rise of profit margins. The margin of 28% in your food costs helps during the fluctuating process with 7%, especially when the prices hike.

If in case one of your ingredients costs too much, you can’t change the entire menu due to it. Also, try setting up average restaurant prices for an item. You must set up a database for all the essential ingredients with the price history of each, which will make you know at the time of the hike.

Increasing Profitability without Removing a Menu Item

If the costs have risen too high, you can adjust it by removing certain items for a brief time or shifting to its substitutes. You can also collaborate with food suppliers to lock in the specific prices for items until a particular time. If you find the menu no longer profitable, you remove and readjust the old with new things. There are some more options to deal with to fix an item in your menu if you can’t cut back during price rise because of the popularity of the dish, which attracts most customers.

Portion sizes- You must know the appropriate portion size for the server and compare it with those you are serving. In case it exceeds it, it’s time to reduce. You must have observed within your period of service about the appetite of the customer. If you feel that the food gets wasted or discarded, you may reduce it by 10%. This reduction will save a lot in the cost of ingredients.

Substitutions- You need to carefully choose the substitution to make it fit right with the dish. You can do this by substituting with a similar brand that won’t impact its taste or quality. This step will also help to save a lot of costs.


One can also sell alcohol per plate to increase profit. It will let you minimize costs, and yield would be relatively higher than anything else listed on the menu. If you cannot increase the menu prices, you can do this by increasing total spending on drinks. You must not surprise your regular customers with an increase in the rate not to lose them and correct the menu’s old price timely.