Restaurants, caterers and other foodservice businesses use a standard food cost formula to determine their profit margin on food sales. A profitable restaurant normally has a food-cost percentage of anywhere from 28 to 35 percent.Continue Reading
To calculate food costs for a specific month, restaurant owners add the value of the inventory at the beginning of the month to the cost of any purchases made throughout the month. They then subtract the value of the inventory left at the end of the month to determine food costs and divide food costs by gross sales for the month to get a food cost percentage.
Food costs vary based on the type of restaurant. A fast-food or casual dining restaurant normally has a lower food-cost percentage than a fine dining establishment.Learn more about Household Budgets
Compare the cost of living between two cities by analyzing your personal salary, adding the cost of your personal expenses such as housing and food in the two cities, and then subtracting the expenses from your annual salary. There are several online calculators that provide insight on the differences between living in two different cities based on factors such as housing, utilities, health care, transportation, groceries and annual salary.Full Answer >
Cost control of food involves several different practices and methods to ensure a restaurant or similar entity reduces spending on food purchases in order to maintain the appropriate profit margin for the business. It may include monitoring and adjusting purchases, changing storage methods and altering menus to include more economical options.Full Answer >
Gross profit is calculated by subtracting the cost of goods sold from sales. Businesses also use these two inputs to calculate gross profit margin, which expresses the relationship between gross sales and cost of goods sold as a percentage.Full Answer >
To calculate profit and loss, evaluate revenue, cost of goods sold and the expenses incurred, then subtract cost of goods sold and expenses from sales. A positive result denoted profit, while a negative result indicates loss.Full Answer >