Question 1

What is recipe costing?

Accepted Answer

Recipe costing is the process of calculating the exact cost of every ingredient and component used to produce a single menu item. A thorough recipe costing also includes factors like labor, waste, and overhead to determine the true "cost per portion." It is the foundation of a profitable menu pricing strategy.

Question 2

Why is "cost per portion" a more useful metric than just ingredient cost?

Accepted Answer

While ingredient cost is the biggest part of a recipe's cost, it's not the whole story. "Cost per portion" is a more comprehensive metric because it includes other significant expenses:Labor: The time it takes for your kitchen staff to prep and cook the dish.Waste: A percentage to account for unavoidable spoilage and trim waste.Overhead: A portion of your restaurant's general expenses (like rent and utilities) allocated to that dish.Using this full cost gives you a much more accurate basis for setting profitable menu prices.

Question 3

How do I determine my overhead percentage?

Accepted Answer

Calculating a precise overhead percentage per dish can be complex. A common industry practice is to use a simplified approach: estimate your total monthly overhead costs (rent, utilities, marketing, insurance, etc.) and express them as a percentage of your total monthly food and labor costs. A typical overhead allocation for recipe costing is between 5% and 15% of the recipe's ingredient and labor cost.

Question 4

What is a "target food cost percentage" used for?

Accepted Answer

Your target food cost percentage is the ideal food cost you want to achieve for your menu items to ensure profitability. This calculator uses your target percentage to suggest a menu price. For example, if your cost per portion is $5 and your target food cost is 30%, the suggested menu price will be $5 / 0.30 = $16.67.

Question 5

How does this calculator help with menu pricing?

Accepted Answer

This tool is essential for data-driven menu pricing. By providing a detailed "cost per portion," it allows you to set a menu price that guarantees a specific profit margin. You can use the "Suggested Menu Price" as a starting point and then adjust it based on market factors, competitor pricing, and what you believe your customers are willing to pay. It removes the guesswork from pricing.

Recipe Costing Calculator

Ingredient 1

Ingredient 2

Ingredient 3

Ingredient 4

Ingredient 5

Labor & Production

Cost Factors

Current Menu Price (Optional)

Results

Understanding Recipe Costing

Frequently Asked Questions

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