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How to Calculate Food Cost for a Recipe

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  • 0:04 Example of Making Recipes
  • 0:57 Cost of Ingredients
  • 1:26 Breaking Up Ingredients
  • 3:04 Calculating Food Cost
  • 4:08 Lesson Summary
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Lesson Transcript
Instructor: Yuanxin (Amy) Yang Alcocer

Amy has a master's degree in secondary education and has taught math at a public charter high school.

After this lesson, you'll know how to calculate the cost of a dish at a restaurant, taking into account the cost of ingredients, overhead, cooking time and other factors, so you will know how much you should charge your customers for it.

Example of Making Recipes

We begin with a recipe. Imagine that you are the chef and owner of a local eatery that is known for tasty home-cooked meals. All your ingredients are fresh and come from local farms. Your recipes contain mostly fresh food items with very few, if any, processed ingredients.

You are in the process of creating a new menu for the fall and winter season that will feature ingredients such as winter melon and pumpkin. As a business owner, you know how important pricing is. Your price for each dish must cover the cost of your ingredients along with your overhead, which includes the cost of the time to prepare the dish along with other restaurant expenses, such as rent, utilities, etc. We will refer to the cost of your ingredients as the food cost. If you have employees, it must also cover the cost of the employees.

How can you go about figuring out the food cost for your dish?

Cost of Ingredients

The first thing you need to do is figure out the cost of your ingredients. To do this, you'll need to know what you paid for your ingredients, along with how much of the ingredient you use for the dish.

Let's do this with an example dish, such as an omelet. To make your omelet, you need eggs and cheese. For the sides, you have potatoes and bacon. So your ingredients are eggs, cheese, potatoes, and bacon. Your purchase prices for these ingredients are on the table:

Ingredient Amount Price
Eggs 1 dozen $2.50
Cheese 1 pound $5.00
Potatoes 10 pounds $2.00
Bacon 16 slices $4.00

Breaking Up Ingredients

Now, you need to break up these prices per dish. You'll need to know how much of each ingredient you use per dish.

For your omelet dish example, each omelet dish with potatoes and bacon uses 3 eggs, 2 ounces of cheese, half a pound of potatoes, and 2 slices of bacon. To calculate the cost of each of these ingredients for the dish, you'll need to figure out how much of your purchase price your used portion works out to.

To calculate the eggs, you first figure out how much each egg is. So, you divide the $2.50 by 12 since there are 12 eggs in a dozen. You get:

$2.50 / 12 = $0.21.

You are using 3 eggs, so you multiply the cost per egg by 3. You get:

$0.21 * 3 = $0.63.

So, this is the cost for your eggs for one omelet dish.

For the cheese, since you are calculating the cost of ounces, you divide the cheese cost by 16 since there are 16 ounces in 1 pound. You get:

$5.00 / 16 = $0.31.

You are using 2 ounces, so you multiply by 2:

$0.31 * 2 = $0.62.

For the potatoes, you are using just half a pound. So you divide your cost of the potatoes by 20 since you have 20 half pounds in 10 pounds. You get:

$2.00 / 20 = $0.10.

For the bacon, you divide the cost of the bacon by the number of slices. You get:

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