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Inventory & Recipes · POS & Retail

Recipe costing: How to price your menu for profit

By CashSheet Team · · 7 min read
Recipe costing: How to price your menu for profit

Why recipe costing matters

If you don't know what a dish costs to make, you can't know if it's profitable. Recipe costing is the foundation of menu pricing, and menu pricing is the foundation of restaurant profitability.

Calculate your food cost per dish

List every ingredient in the recipe with its purchase cost and the quantity used. Divide the purchase cost by the total units to get the cost per unit, then multiply by the amount used in the recipe. Sum all ingredients for the total plate cost.

The food cost percentage formula

Food Cost % = (Plate Cost ÷ Menu Price) × 100. Most restaurants target 28-35% food cost. Fine dining can go higher; fast casual should aim lower.

Use product mix reports

A product mix report shows you which dishes sell the most and which generate the most profit. The sweet spot is high popularity + high margin. Items that are popular but low-margin may need a price increase or portion adjustment.

Update costs regularly

Ingredient prices fluctuate. Review your recipe costs monthly and adjust menu prices quarterly. With CashSheet's inventory module, cost changes flow through automatically — no spreadsheet gymnastics required.

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