What Is the Food Cost Formula?

The food cost formula tells you what percentage of a dish’s selling price is eaten up by the ingredients on the plate:

Food Cost % = (Cost of Ingredients ÷ Menu Price) × 100

For example, if the ingredients on a chicken parm plate cost you $3.85 and you sell it for $14, your food cost is 27.5% — right in the healthy zone. If that same plate sells for $10, your food cost jumps to 38.5% and your margin is in trouble.

What Is a Good Food Cost Percentage?

Most full-service restaurants target a food cost between 28% and 35%. High-volume or bar-driven concepts can run lower; steakhouses and seafood concepts often run higher because of premium proteins. What matters most is knowing your number on every single dish — most menus have a few items quietly running 45%+ that drag down the whole operation.

How to Calculate Food Cost Per Plate (Step by Step)

1. List every ingredient that goes on the plate — protein, sides, sauce, garnish, even the bread and butter

2. Find your price per ounce for each: take the case price and divide by total ounces in the case (a $56 case of 40 lb chicken = $56 ÷ 640 oz = $0.09/oz)

3. Multiply price per oz by ounces used on one plate — that’s your cost for that ingredient

4. Add up every line — that’s your total plate cost

5. Apply the food cost formula — divide plate cost by menu price for your percentage, or divide plate cost by your target percentage to get the menu price you should charge

This calculator does steps 3–5 automatically.

Using the Reverse Food Cost Formula to Price Your Menu

The same formula flipped around tells you what to charge:

Menu Price = Plate Cost ÷ Target Food Cost %

A plate that costs $4.20 at a 30% target food cost should sell for $14.00. The calculator includes a target slider from 20% to 45% so you can price for your concept — and if you already have a menu price, enter it and the calculator grades your actual food cost in green, yellow, or red.

Why Cost Recipes by the Ounce?

Pricing by the ounce keeps every recipe consistent no matter how your suppliers package things. Cases, bags, and bulk packs all reduce to one common unit, portion sizes are specified in ounces on your recipe cards anyway, and when an invoice price changes you only update one number to re-cost every dish that uses that ingredient.

FAQ Section

What is the food cost formula?

Food Cost % = (Cost of Ingredients ÷ Menu Price) × 100. It tells you what share of each menu price goes to the food on the plate. The inverse version — Plate Cost ÷ Target % — tells you what to charge.

How do I calculate food cost percentage?

Add up the cost of every ingredient on the plate, then divide by the menu price and multiply by 100. A $4 plate cost on a $13 menu item is a 30.8% food cost.

What is a good food cost percentage for a restaurant?

28–35% is the standard range for full-service restaurants. Below 28% is excellent. Consistently above 38% means the item is underpriced, over-portioned, or your ingredient costs have crept up since you last costed the recipe.

How do I find an ingredient’s price per ounce?

Divide what you pay by the total ounces in the package. A $56 case containing 40 pounds is 640 ounces, so the price per ounce is about $0.09. Do this once per ingredient and every recipe using it costs out automatically.

How do I price a menu item using food cost?

Divide your plate cost by your target food cost percentage. A dish that costs $5.25 to plate at a 30% target should be priced at $17.50. Round up to a clean menu number from there.

How often should I recalculate my food costs?

Re-cost your top sellers at least quarterly and any time a major ingredient price changes. Food prices move constantly — a recipe costed two years ago is almost certainly wrong today.

What’s the difference between food cost and plate cost?

Plate cost is the dollar amount of ingredients on one dish. Food cost (or food cost percentage) is that dollar amount expressed as a percentage of the menu price. The food cost formula connects the two.