A menu price that "feels right" can hide a dish that loses money every time it leaves the pass. Costing recipes takes an afternoon the first time, and after that it's a habit: the reward is knowing exactly which plates pay for the kitchen.
Check one dish right now with the free Food Cost Percentage Calculator.
Step 1: cost each ingredient per usable unit
Start from what you actually pay: pack price divided by pack size gives the as-purchased cost per kilo, litre or each. Then account for yield, the share you can actually use after trimming, peeling, boning or cooking loss. If a 10 kg case of onions costs $12 and you lose 12% to peel and ends, the usable cost is $12 ÷ 10 ÷ 0.88 = $1.36 per kg, not $1.20. The free Ingredient Yield Cost Calculator does this sum for you. Yield matters most for proteins and produce; dry goods are usually close to 100%.
Step 2: build the recipe card
List every ingredient in the dish with the quantity in the same unit you costed it in. Include the things that are easy to forget: oil, garnish, sauces, bread on the side, even the takeaway box if it goes out with the plate. Add the line costs to get the plate cost. If a recipe makes a batch, divide by the number of portions.
Step 3: compare with your menu price
Food cost % = plate cost ÷ menu price. A $3.85 plate on a $14 menu price runs at 27.5%. To find the price that hits a target, divide the other way: price = plate cost ÷ target %. At a 30% target that $3.85 plate needs at least $12.83. Many operators work somewhere around 25-35%, but the right target depends on your concept, labour and rent, so set your own.
Step 4: watch it weekly, not yearly
Recipe costing tells you what a dish should cost. Actual food cost comes from the till and the storeroom: opening inventory + purchases − closing inventory = food cost used, divided by food sales for the same week. A gap between the two usually means waste, portioning drift or unrecorded staff meals. Logging waste with a reason (spoiled, overproduction, returned plate) shows which fix pays first.
Keep prices current
Supplier prices change constantly. Keep ingredients in one list so a single update re-costs every dish that uses it. The Recipe Cost & Menu Pricing Workbook is built that way, with a status flag on every menu item that drifts above your target.
This guide is general information for planning, not accounting, tax or financial advice. Figures in the examples are illustrative.