Restaurant Food Cost Glossary
The costing vocabulary that actually shows up in a kitchen office, defined plainly — with the nuance that the textbook definitions leave out.
The costing vocabulary that actually shows up in a kitchen office, defined plainly — with the nuance that the textbook definitions leave out.
Food cost percentage is the share of a dish’s menu price that was spent on the ingredients, calculated as (plate cost ÷ menu price) × 100.
Most full-service restaurants target 28–35%. It is a guardrail, not a goal — a 38% steak that returns $22 beats a 22% salad that returns $6. Work yours out in the food cost calculator.
Plate cost is the total cost of every ingredient that reaches the guest on one plate, including garnish, cooking oil, and sauce.
The quiet ingredients are where plate cost goes wrong. Individually they are pennies; across a menu they are a point or two of food cost that never appears in a spreadsheet.
Prime cost is cost of goods sold plus total labor, divided by revenue — the two largest expenses a restaurant can still change after it opens.
Target 60–65% for full service. It matters more than either half alone because the halves trade against each other: pre-cut produce lowers labor and raises food cost. Calculate yours.
Labor cost percentage is total labor cost — wages plus payroll taxes, insurance, and benefits — divided by revenue for the same period, times 100.
Burden adds roughly 10–20% on top of gross wages. Tracking wages alone understates what your team actually costs and makes every staffing decision optimistic.
COGS is what a restaurant spent on the food and beverage it actually sold in a period, calculated as opening inventory + purchases − closing inventory.
Note that it is not the same as what you bought. Purchases that are still sitting on the shelf at period end belong to next period, which is why inventory counts matter even when nothing seems to be missing.
Yield percentage is how much of a purchased ingredient survives trimming, peeling, and cooking to reach the plate, expressed as usable weight ÷ purchased weight × 100.
Broccoli yields around 61%, whole tenderloin around 70%. Ignore yield and every produce- and protein-heavy dish on your menu reads cheaper than it is. Yield calculator.
AP is the weight and price of an ingredient as it arrives from the vendor; EP is the weight and true cost of what remains after trim and prep.
Recipes should be costed in EP. A $2.00/lb AP price on an ingredient that yields 61% is really $3.28/lb EP — the number that belongs in the recipe.
Cost per usable pound is the as-purchased price divided by the yield percentage, giving the real cost of the portion that reaches a plate.
It is the single correction that separates a food cost number you can act on from one that flatters you.
Theoretical food cost is what your recipes say you should have spent given what you sold; actual food cost is what you really spent. The gap between them is variance.
A tight theoretical number with a loose actual number means the recipes are right and something else — over-portioning, waste, theft, or mis-rings — is leaking money.
Variance is the difference between theoretical and actual food cost, usually stated as a percentage of sales.
Under 1% is normal noise. Sustained variance above 2–3% is a process problem, and it will not be found in the recipes — look at portioning, receiving, and waste logging.
Contribution margin is menu price minus plate cost — the actual dollars a dish contributes toward labor, rent, and profit.
It is the corrective to food cost percentage. Percentages rank dishes by efficiency; contribution margin ranks them by how much money they make you.
PMIX is the report from your POS showing how many of each menu item sold over a period.
It is the other half of menu engineering: recipe costs tell you what each dish earns, PMIX tells you how often it earns it. Neither is useful alone.
Pour cost is food cost percentage for drinks — the cost of the liquor, mixers, and garnish divided by the drink’s selling price.
Typically 18–24%, well below food, which is why a strong bar program subsidizes a thin kitchen. See pour cost basics.
Recipe costing is calculating what one batch or one portion of a recipe costs by pricing each ingredient at its yield-adjusted unit cost and adding them up.
Doing it once is a twenty-minute job. Doing it again every time a price moves is the job nobody does by hand — which is what costing software is for. Cost a recipe.
A sub-recipe is a prep item — a sauce, stock, dough, or spice blend — that is costed once as a batch and then used as a priced ingredient inside other recipes.
Sub-recipes are where hand-costing collapses: change one ingredient in a mother sauce and every dish using it should re-cost, which is only realistic if software is doing it.
A par level is the target quantity of an item to have on hand at the start of a service period, set high enough to get through it without running out.
Pars turn ordering from a judgment call into subtraction: count what you have, order the difference.
Shrinkage is inventory that disappears without being sold — spoilage, over-portioning, breakage, comps, staff meals, and theft.
It shows up as variance between theoretical and actual food cost. Logging waste is the only way to tell which kind of shrinkage you have.
Invoice reconciliation is checking a delivery invoice against what was actually received and against the price you were quoted.
Broadline prices move weekly and not always in your favor. Reconciliation catches both the short delivery and the silent price increase — the second is far more common.
A broadline distributor is a wholesale supplier carrying a wide range of categories — produce, protein, dry goods, chemicals, disposables — in one delivery.
Sysco, US Foods, Performance Food Group are the large US examples. Their invoices are long, dense, and the main reason invoice scanning exists.
Case price is what you pay for the whole pack; unit price is the case price divided by how many units the case contains.
Recipes need unit price. Most costing mistakes are a case price used where a unit price belonged, which understates a dish by the size of the case.
Portion control is the use of scales, scoops, ladles, and portioned packs to make every plate of a dish carry the same cost.
It is the cheapest food-cost intervention there is. A recipe costed at 4 oz of protein and plated at 5 oz is 25% over on the most expensive line of the dish.
Break-even is the revenue at which total costs are covered exactly — fixed costs divided by contribution margin ratio.
Knowing yours converts a vague sense of a slow week into a specific number of covers.
Overhead is every cost that is not food, beverage, or labor — rent, utilities, insurance, software, repairs, marketing.
Mostly fixed, mostly locked in before you open, which is exactly why prime cost gets the attention: it is the part still under your control.
Free calculators for the terms above: recipe cost, food cost %, menu price, yield, labor cost, and prime cost. Longer reads live in the guides.
Freecost is free recipe-costing software for restaurants — the terms above, calculated continuously against your real ingredient prices instead of by hand.
Start free — no credit cardFreecost is free recipe-costing software built by a chef. Web + Android.