Pricing & margin
Recipe Costing
Formula reviewed by Tahir Asif, CMA
Working out what a dish costs to make by pricing every ingredient at the quantity used, adjusted for trim and cooking losses.
Recipe costing adds up the cost of each ingredient in a recipe and divides by the number of portions to get a cost per portion. Each ingredient is priced from what was paid per unit as purchased, then adjusted for the share that is lost to trimming, peeling, boning and cooking, so that the cost reflects what is actually served.
The cost per portion is the input to food cost percentage and menu pricing. Recipe costs go stale when ingredient prices or yields change, so they should be refreshed regularly.
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