Question 1

How do you calculate recipe cost per portion?

Accepted Answer

Add up the cost of every ingredient in the recipe, then divide by the number of portions it makes. For example, if your ingredients total £4.80 and the recipe makes 12 portions, your cost per portion is £0.40. Include everything - even salt, oil, and garnishes.

Question 2

What is a good gross margin for a restaurant?

Accepted Answer

Most UK restaurants target a food cost percentage of 28-35%, which means a gross margin of 65-72%. Cafes and bakeries often achieve higher margins (70-75%) on drinks and baked goods. The key is knowing your actual margin per dish, not just an average across the menu.

Question 3

How do you calculate food cost percentage?

Accepted Answer

Food cost percentage = (cost of ingredients / selling price) x 100. If a dish costs £2.50 to make and sells for £8.50, your food cost is 29.4%. For VAT-registered businesses, use the ex-VAT selling price. This calculator handles the maths automatically.

Question 4

Should I include VAT when calculating recipe costs?

Accepted Answer

Your ingredient costs are usually ex-VAT (you reclaim input VAT). For the selling price, use the ex-VAT price if you are VAT registered, or the full price if you are not. This gives you the true gross margin before tax.

Recipe Costing Calculator

Recipe Details

Recipe Ingredients

Cost Summary

Like this? The full version updates itself.