# How do I calculate food cost?

One of the questions that many chefs ask is: How do I calculate food cost? They will often shy away from getting involved with this area of the business as they have never been taught how to calculate a Gross Profit (GP) or there is someone in the business that calculates the food cost figures for them. However it is essential that a good business chef knows and understands how this is calculated. This is the difference between a CHEF and a COOK, chefs are (and must be!) interested in how their restaurants make or lose money.

The food cost % is then calculated by dividing the COST PRICE by the SELLING PRICE and multiplying by 100 as in the equation above.

In this case, take the cost of the food and divide it by the percentage food cost you wish to achieve, multiply by 100 to find the selling price and add the VAT.

## How to calculate food cost for a recipe

**A recipe is written and costed inclusive of any wastage. This total of the individual ingredients gives up the COST PRICE. The price you sell the dish at is the SELLING PRICE, which will have VAT included (currently set at 20% in the UK but will vary according to location). To find the true selling price the VAT must be removed.**

Food cost definition

The food cost % is then calculated by dividing the COST PRICE by the SELLING PRICE and multiplying by 100 as in the equation above.

**Example:**Assume the Cost Price is £2.00 and the Selling Price is £12.00 To remove the tax (20%) from the selling price, divide by 1.2 * (see notes on VAT below) So the Selling Price (less VAT) = £10.00

Food cost formula – how to calculate food cost per meal

In this case, take the cost of the food and divide it by the percentage food cost you wish to achieve, multiply by 100 to find the selling price and add the VAT.
**Example:**To achieve food cost of 15%:## Calculating Food Cost % on a Monthly Basis – food cost formula

Food cost on a monthly or even weekly basis is also useful. Cost of food is the total of all food purchases from suppliers less any returns / credits you are owed. The variance in stock value is either added or subtracted according to the stock take figures. This value of the stock is the difference between the opening stock at the beginning of the period and the closing stock at the end. If the value of the stock is greater ie, there is an increase in the value of the stock you are holding, then this amount is subtracted from the food cost. If the figure is less ie, you have used some of the stock you were holding, the cost of this must be added to the food cost. Total food revenue is all the takings for food over any given period, less the VAT.**Example:**Presuming the VAT figure is still 20%