How to cost a recipe, step by step
One dish taken the whole way, from the supplier invoice to a menu price and a delivery margin, with every number shown so you can follow it with your own.
Costing a dish is five steps: turn each invoice line into a cost per usage unit, adjust for yield, multiply by what the recipe uses, divide by the portions it makes, and read the result against your target. Everything else in this Academy is one of those five steps in more detail.
This guide runs all five on one dish without skipping anything, so you can put your own invoice beside it and follow along.
Step 1: turn the invoice into a cost per usage unit
You do not buy in the units you cook in. The invoice is in packs, the recipe is in grams, and the first job is to reconcile the two.
Cost per usage unit = pack price divided by pack quantity in your usage unit
Five lines off one delivery note:
- Smoked salmon, 1 kg at $38.00: $38.00 divided by 1,000 g = $0.038/g
- Bagels, 12 in a bag at $7.20: $7.20 divided by 12 = $0.60 each
- Cream cheese, 2 kg tub at $14.50: $14.50 divided by 2,000 g = $0.00725/g
- Red onion, 5 kg sack at $9.00: $9.00 divided by 5,000 g = $0.0018/g
- Capers, 700 g jar at $8.40: $8.40 divided by 700 g = $0.012/g
Store these against the ingredient, not against the dish. Every dish that uses salmon should read the same $0.038, so a price rise moves all of them at once.
Step 2: adjust for yield
Only the onion loses anything here. Peel and trim the ends and about 90% reaches the board, so the price you actually pay per usable gram is higher than the invoice suggests.
Cost per usable gram = $0.0018 divided by 0.90 = $0.0020
Skip this step and every dish using a trimmed ingredient is understated. The rest of these ingredients are 100% usable, which is why only one line moves.
Step 3: multiply by what the recipe uses
A smoked salmon bagel:
- Smoked salmon, 60 g at $0.038: $2.28
- Bagel, 1 at $0.60: $0.60
- Cream cheese, 40 g at $0.00725: $0.29
- Red onion, 15 g at $0.0020: $0.03
- Capers, 5 g at $0.012: $0.06
Total recipe cost = $3.26
Step 4: divide by the portions it makes
This recipe makes one bagel, so cost per portion is the same $3.26. On anything batched, this is where it stops being the same: a chili costing $31.00 that yields 12 bowls is $2.58 a bowl, and the divisor has to be what the batch actually plates, not what it was meant to.
Cost per portion = total recipe cost divided by portions the recipe yields
Step 5: read it against your target
The bagel sells for $9.50.
- Food cost %: $3.26 divided by $9.50 x 100 = 34.3%
- Gross profit: $9.50 minus $3.26 = $6.24
- Price to hit a 30% target: $3.26 divided by 0.30 = $10.87
Sandwiches usually run 28 to 34%, so at 34.3% this one is at the top of its band and the target price says $10.87 against the $9.50 actually charged. That is the whole point of the exercise: not the number, the decision it forces.
The step most people miss: the same dish on delivery
Packaging and commission are not in the figures above, because they are not properties of the recipe. They are properties of how the dish is sold, and the same bagel carries a box on delivery and nothing at all in the room.
On a platform charging 25%, with $0.22 of box and napkin:
Delivery profit = $9.50 minus $2.38 commission minus $3.26 recipe minus $0.22 packaging = $3.64
That is a 38.3% delivery margin against a $6.24 gross profit dine-in. Same dish, same recipe cost, and a very different answer, which is why the recipe figure is kept clean and the channel costs are applied on top.
What to do with the five numbers
- Cost per usage unit belongs on the ingredient, so one price change updates every dish.
- Yield belongs on the ingredient too, for the same reason.
- Cost per portion is the figure everything else is derived from, so an error here is the same error four times.
- Food cost % tells you whether to look; gross profit tells you whether it matters.
- The target price is a floor, not a recommendation. Charge more where the market allows.
Frequently asked questions
- Do I have to do this for every dish?
- Start with your top ten by volume. They are most of your food cost, and the rest can wait until the first ten have told you whether you have a pricing problem or a portioning one.
- What if an invoice price changes every week?
- Cost at what you actually pay now and revisit when it moves materially. Chasing a few cents weekly costs more attention than it returns, but a 10% move on your highest-volume ingredient is worth acting on the same week.
- Where does labor come in?
- Nowhere in this figure. Cost per portion is a food cost, and labor is measured across a period as part of prime cost, because the kitchen is staffed whether you sell 40 covers or 140.
- My number looks too good. What did I miss?
- Usually yield, packaging on a delivery-heavy dish, or a batch divisor set to what the recipe should make rather than what it does. All three flatter the result, and all three are in the steps above.
Enter what you bought and what the recipe takes out of it, and read the result.
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