How to calculate the cost of a dish step by step: a worked example
You cannot price a dish properly without knowing what it really costs. This method works for any dish, with an example using illustrative numbers (not market prices).
The five steps
Write the recipe in weights, then calculate:
- 1) The price per kilo or unit of each ingredient from your latest purchase invoice.
- 2) Each ingredient's weight in one portion × price per kilo = ingredient cost.
- 3) Add the yield loss (trimming, cutting, cooking) if the weight is not net.
- 4) Add up the costs and include packaging and sides (bread, sauce, box).
- 5) Suggested price = cost ÷ your target food-cost percentage.
An illustrative example
Hypothetical numbers only to explain the method: a sandwich with ingredient cost 0.90 JOD, bread 0.15, sauces 0.10 and packaging 0.08. Total 1.23 JOD. With a 30% target food-cost percentage the suggested price = 1.23 ÷ 0.30 ≈ 4.10 JOD. Then compare with market prices around you and adjust.
Why recipes automate this
Ingredient prices change, so the cost you calculated yesterday is no longer right today. When the recipe is in the system and the purchase price updates with every purchase invoice, the cost updates automatically and each sale deducts the ingredients. That is what recipes do in RAWA.
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What food-cost percentage is right?
It varies by business; many restaurants aim around a third or less. Set your target from your margin and your other costs.
Should I include yield loss?
Yes, if the weight you buy differs from the net weight on the plate, as with vegetables and bone-in chicken.
Does cost change with purchase prices?
Yes; that is why it is best updated automatically from purchase invoices.
Does RAWA calculate the cost?
Yes, recipes give each item's cost and deduct stock.