How to Figure Out the Selling Cost of a Menu Item
- 1). Calculate the edible yield of the menu item by dividing its edible weight by its purchased weight and dividing by 100. Remember, some dishes are not completely edible as they may contain bones, fat or shells. For example, if you purchased 150 pounds of lobster and only 110 pounds of the lobster is edible, dividing 110 by 150 and multiplying by 100 gives an edible yield of 73.33 percent, or 0.7333 when expressed in decimal terms.
- 2). Calculate the purchased cost per portion by dividing the purchased cost by the number of portions. For example, if you purchased 15 lobsters for $10 each, and one lobster is equal to one portion, then dividing $150 by 10 gives a cost per portion of $15.
- 3). Divide the purchased cost per portion by the edible yield of the menu item to derive the edible cost per portion. Using the same example, dividing the cost per portion of $15 by the edible yield of 0.7333 gives an edible cost per portion of $20.46
- 4). Determine your desired cost percentage. This figure represents the cost percentage your restaurant wants to achieve. Main courses tend to have a higher cost percentage than appetizers. The desired cost percentage also depends on the type of food you serve. Soups, for example, often have a low desired cost percentage, while labor-intensive dishes with high purchasing costs often have a higher desired cost percentage.
- 5). Divide the edible cost per portion by its desired cost percentage to calculate the item's selling price. Using the same example, if the edible cost per portion of the lobster is $20.46 and you set a desired cost percentage of 45 percent, dividing $20.46 by 0.45 gives a selling price of $45.46.
- 6). Adjust your menu prices according to demand and purchasing cost. An expensive dish may not sell well due to its high price. In such a scenario, you should either lower your desired cost percentage or find ways to purchase your raw foods at a lower price.
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