Designed and Written By: Steve Ngo Knowing how much it costs you to sell the food in your restaurant is critical for running a profitable restaurant operation. Follow through on our presentation to learn how to appropriately calculate your food cost so you can stay afloat on your operation's expenses. For more information and related content, please visit us at http://www.rmagazine.com

1. FooC
How to
Your
CALCULATE

2. KNOWLEDGE
iPower

3. Knowin
howmuchitct
youtosellthefoodyou
selliscriticainrunninga
profitablerestaurant
operation.

4. Knowin
howmuchitct
youtosellthefoodyou
selliscriticainrunninga
profitablerestaurant
operation.
Knowin
yourfoodcost
comparedtoyoursales
andyouridealfood
costenableyoutostayin
commanofyourrestaurant
operationandultimatelyoperationandultimately
controyourprofit
andloss.

5. Tocalculate
youractualfood
costs,startby
takingan
inventorycount
ofallyourfood.

6. Bycounting
yourinventory,you
willbeabletocom up
withadollaramounof
yourinventorybymultiplyin
outhevaluofallthefood
itemsonhand.itemsonhand.

7. Bycounting
yourinventory,you
willbeabletocom up
withadollaramounof
yourinventorybymultiplyin
outhevaluofallthefood
itemsonhand.itemsonhand.
Youwillalsoneed
totracanypurchasesyou
madeduringthetime
periodyouwanttoanal

8. Bycounting
yourinventory,you
willbeabletocom up
withadollaramounof
yourinventorybymultiplyin
outhevaluofallthefood
itemsonhand.itemsonhand.
Doanotherinventory
countattheen ofthe
periodyouwanttoanalyze
togettheendin inventor
amount.
Youwillalsoneed
totracanypurchasesyou
madeduringthetime
periodyouwanttoanal

9. Sothe
actuafoo
c equatio
lookslikethis:

10. Sothe
actuafoo
c equatio
lookslikethis:
starting
inventory

11. Sothe
actuafoo
c equatio
lookslikethis:
starting
inventory purchases
+

12. Sothe
actuafoo
c equatio
lookslikethis:
starting
inventory purchases ending
inventory
+ -

13. Sothe
actuafoo
c equatio
lookslikethis:
starting
inventory purchases ending
inventory
costof
foodfor
period
+ - =

14. Nowlet’sfigure
outhowtocalculate
idealfoodcost

15. Nowlet’sfigure
outhowtocalculate
idealfoodcost
Idealfoodcost
istheamountofmoney
thefoodyousoldduring
theperiodyouareanalyzing
shouldhavecostyou

16. Nowlet’sfigure
outhowtocalculate
idealfoodcost
Inaperfectworld,
idealfoodcost=actualfoodcost
Idealfoodcost
istheamountofmoney
thefoodyousoldduring
theperiodyouareanalyzing
shouldhavecostyou

17. Nowlet’sfigure
outhowtocalculate
idealfoodcost
Idealfoodcost
istheamountofmoney
thefoodyousoldduring
theperiodyouareanalyzing
shouldhavecostyou
Unfortunately,
wedonotliveinan
idealworldanditis
nearlyimpossiblefor
themtobethesame
Inaperfectworld,
idealfoodcost=actualfoodcost

18. Nowlet’sfigure
outhowtocalculate
idealfoodcost
Idealfoodcost
istheamountofmoney
thefoodyousoldduring
theperiodyouareanalyzing
shouldhavecostyou
Inaperfectworld,
idealfoodcost=actualfoodcost
Thedifference
betweenyourideal
andactualfoodcosts
isyourvariance.
Unfortunately,
wedonotliveinan
idealworldanditis
nearlyimpossiblefor
themtobethesame

19. Significantvariance
indicatesthereare
problemswithinyour
restaurantoperation.

20. Significantvariance
indicatesthereare
problemswithinyour
restaurantoperation.
Thiscouldinclude
anythingsuchaspoor
stafftraining,poorprep
procedures,badfoodreceiving
procedures,theft,waste,
under-portioning,or
over-portioning.over-portioning.

21. Tocalculateyour
idealfoodcostsuse
thisequation:

22. Tocalculateyour
idealfoodcostsuse
thisequation:
Recipe
costfor
menuitem

23. Tocalculateyour
idealfoodcostsuse
thisequation:
Recipe
costfor
menuitem
number
ofitemssoldX

24. Tocalculateyour
idealfoodcostsuse
thisequation:
Recipe
costfor
menuitem
number
ofitemssold
idealcost
foritemX =

25. Tocalculateyour
idealfoodcostsuse
thisequation:
Recipe
costfor
menuitem
number
ofitemssold
idealcost
foritemX =
Sumof
idealcost
forallitems

26. Tocalculateyour
idealfoodcostsuse
thisequation:
Recipe
costfor
menuitem
number
ofitemssold
idealcost
foritemX =
=
Sumof
idealcost
forallitems
ideal
foodcost

27. Nowthatwe
knowhowtocalculate
actualfoodcostand
idealfoodcost,wecan
proceedtocalculate
thefinalstep...

28. Nowthatwe
knowhowtocalculate
actualfoodcostand
idealfoodcost,wecan
proceedtocalculate
thefinalstep...
FOODCOST
PERCENTAGE!

29. Foodcostpercentage
iswhatyourfoodcostyouto
servecomparedtoyoursales
amountduringtheperiodyou
areanalyzing.
FOODCOST
PERCENTAGE!

30. FOODCOST
PERCENTAGE

31. FOODCOST
PERCENTAGE
Actual
foodcost

32. FOODCOST
PERCENTAGE
Actual
foodcost
Total
foodsales

33. FOODCOST
PERCENTAGE
Actual
foodcost
Total
foodsales
Actual
FoodCost
Percentage
=

34. FOODCOST
PERCENTAGE
Actual
foodcost
Total
foodsales
Actual
FoodCost
Percentage
=
Ideal
foodcost

35. FOODCOST
PERCENTAGE
Actual
foodcost
Total
foodsales
Actual
FoodCost
Percentage
=
Ideal
foodcost
Total
foodsales

36. FOODCOST
PERCENTAGE
Actual
foodcost
Total
foodsales
Actual
FoodCost
Percentage
=
=
Ideal
foodcost
Ideal
FoodCost
Percentage
Total
foodsales

37. Theresultingpercentages
arethepercentofyoursales
thatgoestopayforthefood
yousell

40. SteveNgo