01 / HOW TO USE IT
From inputs to a usable kitchen figure
- 01
Enter the per-serving food cost and current menu price.
- 02
Enter a target food-cost percentage.
- 03
Calculate and compare current percentage, gross profit, margin, and target price.
02 / WHEN IT HELPS
Useful for everyday production planning
- Reviewing menu profitability after a cost change
- Testing a proposed selling price
- Finding the price implied by a food-cost target
03 / THE WORKING MODEL
Assumptions and limitations
Assumptions
- Food cost and price use the same currency.
- Gross profit here means menu price minus entered food cost.
- Target price is calculated before tax, service charges, or rounding policies unless those are already included.
Check before using
- This is not net profit and excludes labour, overhead, commissions, waste, tax, and other operating costs.
- It does not recommend what customers will accept or what regulations permit.
- Pricing decisions require a complete business and market review.
04 / QUICK ANSWERS
Frequently asked questions
What is food-cost percentage?
It is the per-serving food cost divided by menu price, multiplied by 100.
Is gross margin the same as markup?
No. Gross margin divides gross profit by selling price; markup divides profit by cost.
How is the target menu price found?
The food cost is divided by the target food-cost percentage expressed as a decimal.