Calculating Cost Of Goods Sold Restaurant

Food COGS Formula:

\[ Food\ COGS = Beginning\ Food\ Inv + Purchases - Ending\ Food\ Inv \]

Food COGS (USD):

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1. What is Food Cost of Goods Sold?

Food Cost of Goods Sold (COGS) represents the direct costs attributable to the production of the food sold by a restaurant. It includes the cost of the food inventory used during a specific period to generate revenue.

2. How Does the Calculator Work?

The calculator uses the standard Food COGS formula:

\[ Food\ COGS = Beginning\ Food\ Inventory + Purchases - Ending\ Food\ Inventory \]

Where:

Beginning Food Inventory — Value of food inventory at the start of the period (USD)
Purchases — Additional food inventory purchased during the period (USD)
Ending Food Inventory — Value of food inventory at the end of the period (USD)

Explanation: This formula calculates the actual cost of food consumed during a specific accounting period, which is essential for determining gross profit and food cost percentage.

3. Importance of Food COGS Calculation

Details: Accurate Food COGS calculation is crucial for restaurant profitability analysis, menu pricing, inventory management, and identifying potential waste or theft issues. It directly impacts gross profit margins and overall financial health.

4. Using the Calculator

Tips: Enter all values in USD. Beginning and ending inventory should be based on physical counts. Purchases should include all food items bought during the period. All values must be non-negative numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is included in Food COGS?
A: Food COGS includes all food ingredients used in menu items, including meats, vegetables, dairy, grains, and spices. It excludes non-food items like packaging, labor, and overhead costs.

Q2: How often should Food COGS be calculated?
A: Most restaurants calculate Food COGS monthly, but weekly calculations can provide more timely insights for inventory management and cost control.

Q3: What is a good Food COGS percentage?
A: Typically 28-35% of food sales, but this varies by restaurant type. Fine dining may have higher percentages while fast food usually has lower percentages.

Q4: How do you calculate Food Cost Percentage?
A: Food Cost Percentage = (Food COGS ÷ Total Food Sales) × 100. This metric helps evaluate pricing strategy efficiency.

Q5: What causes high Food COGS?
A: Common causes include food waste, over-portioning, theft, inaccurate inventory counts, rising food prices, or inefficient purchasing practices.