Costing Your Menu: Food Cost % & Margins
Price with confidence. Learn food cost %, contribution margin, and a repeatable workflow to cost every item and protect profitability as prices change.
Key Concepts
Food Cost %
Food Cost % = (Food Cost / Price) × 100. Use lower % for beverages and sides; higher for premium mains.
Contribution Margin
CM = Price − Food Cost. Optimizes gross profit per item; pair with mix to choose featured items.
Use Food Cost % to keep categories within healthy ranges while monitoring contribution margin on hero items. CM better reflects cash generated per sale, which matters for constrained-service operations like food trucks where throughput and average check drive profits.
Include waste and yield factors in every recipe. For produce and proteins, actual edible yield can vary 5–20%. Underestimating waste is the fastest way to erode margins without noticing.
Build and maintain your costing
Use our Menu Costing tool and quarterly review checklist to stay profitable.
FAQs
Templates & Resources
Case Examples
| Item | Price | Food Cost | CM | Class |
|---|---|---|---|---|
| Chicken Bowl | $12.49 | $3.45 | $9.04 | Star |
| Loaded Fries | $8.99 | $2.10 | $6.89 | Star |
| Vegan Wrap | $11.99 | $4.20 | $7.79 | Puzzle |
| BBQ Brisket Sandwich | $13.49 | $5.10 | $8.39 | Plow Horse |
| Caesar Salad | $9.49 | $2.25 | $7.24 | Star |