Recipe costing and food cost percentage: what a dish costs and what to charge
A recipe costing sheet is a standardized recipe with the cost of each ingredient. It answers two questions: what one portion costs and whether the menu price covers it with room to spare. The key number is the food cost percentage: ingredient cost divided by menu price.
How to build it
For each ingredient, write down the amount used, the price paid and the package size. If the item loses weight in prep (peel, bone, trim), use the waste factor: as-purchased weight ÷ edible-portion weight. Item cost = amount × factor × price ÷ package size. Add the items, add a small percentage for spices, gas and minor waste, and divide by the yield.
Example
A 10-portion lasagna costs $26.44 in ingredients; with 5% other costs, $27.76, or $2.78 per portion. At $9.50 it runs a 29.2% food cost. For a 30% food cost, the price would be $9.25; with a 3× markup, $8.33.
| Food cost | Equivalent markup | Price for a $3 cost |
|---|---|---|
| 25% | 4.0× | $12.00 |
| 30% | 3.33× | $10.00 |
| 35% | 2.86× | $8.57 |
Food cost is not profit
What is left after food cost has to pay labor, rent, utilities, card and delivery app fees and taxes, and only then profit. That is why the right target depends on the concept: pizza and pasta often run lower food cost, steak and seafood higher. Take the portion cost to the pricing calculator to include fees and fixed costs.