Mastering Menu Profitability: How To Cost Food

Written By Connor Welsh

Understanding Food Costing for Profitability

Effective bar and restaurant management requires a deep understanding of the cost of each item on your menu. It is essential for maintaining profitability and achieving your financial goals. While the process is nearly identical to costing a drink, food can be more complex and contain more sub-recipes.

In this article, we'll delve into the intricacies of costing food using a classic example: the burger. First, we'll cover the manual (i.e. slow!) process, step by step, and then introduce a more efficient solution for food cost analysis.

Costing out this burger is going to get a bit complicated. If you’d rather hear the quickest and easiest way to do this first, you should sign up for Spec and see for yourself.


Cost a food recipe in less than 10 minutes using Spec!



Cost a food recipe in less than 10 minutes using Spec!

With Spec, you can:

  • Eliminate the need for manual calculations

  • Keep the price of your ingredients up to date based on invoices

  • Tracks back-of-house labor on recipes


Get started with Spec today to take control of your menu profitability. Now, for the manual way.



How to Cost Food: The Manual Way

Let's break down the process of costing a food item manually. In this example, a burger. Even if you don’t plan to do it this way, having a solid understanding of how all this math works can be helpful. 

Ok, let’s get started…


Step 1:

Identify and list all ingredients. Begin by listing every ingredient used in preparing the burger. 

  • Bun 

  • Beef

  • Slice of Cheddar Cheese

  • Pickles

  • Caramelized Onion

  • Burger Sauce

  • Salt

  • Pepper

Step 2:

Create Sub-Recipes. For ingredients prepared ahead of time (not on the line), write down the ingredients used in each.

Bun

  • Beef

  • Cheddar Cheese

  • Pickles

    • Ingredient: Pickling cucumber

    • Ingredient: Garlic clove

    • Ingredient: Salt

    • Ingredient: Water

    • Ingredient: Apple Cider Vinegar

  • Caramelized Onions

    • Ingredient: Onion

    • Ingredient: Black Pepper

    • Ingredient: Salt

    • Ingredient: Sugar

  • Burger Sauce

    • Ingredient: Mayonnaise

    • Ingredient: Mustard

    • Ingredient: Garlic Oil

    • Ingredient: Salt

  • Salt

  • Pepper

Step 3:

Identify Sub-Sub-Recipes. Yes, you heard that right. If any of the ingredients you just listed are also prepared ahead of time (meaning, they are recipes all on their own) then list out those ingredients.

  • Bun

  • Beef

  • Cheddar Cheese

  • Pickles

    • Ingredient: Pickling cucumber

    • Ingredient: Garlic clove

    • Ingredient: Salt

    • Ingredient: Water

    • Ingredient: Apple Cider Vinegar

  • Caramelized Onions

    • Ingredient: Onion

    • Ingredient: Black Pepper

    • Ingredient: Salt

    • Ingredient: Sugar

  • Burger Sauce

    • Ingredient: Mayonnaise

    • Ingredient: Mustard

    • Ingredient: Garlic Oil

      • Sub-Ingredient: Garlic Clove

      • Sub-Ingredient: Oil

    • Ingredient: Salt

  • Salt

  • Pepper

Step 4:

Portion Out the Ingredients. Once your ingredients and all sub-recipes are listed, determine how much is in each recipe. If you don’t know, now is the time to figure that out. You may need to ask your back-of-house staff to take measurements for you next time they prepare the recipes. 

Generally, ingredients that are liquids should be measured with volume. For solids, weight is ideal. 

Another thing to consider is what unit the ingredient is purchased in versus how it gets portioned into the recipe. Salt, for example, is purchased by weight but often eyeballed by volume. Have your staff measure ingredients with the unit the item was purchased as.

  • Bun x 1 ct

  • Beef x 0.25 lb

  • Cheddar Cheese x 1 ct

  • Pickles x 3 ct

    • Ingredient: Pickling cucumber x 50 lbs

    • Ingredient: Garlic clove x 0.25 lb

    • Ingredient: Salt x 10 tbsp

    • Ingredient: Water x 10 qt

    • Ingredient: Apple Cider Vinegar x 10 qt

  • Caramelized Onions x 2 oz

    • Ingredient: Onion x 20 lb

    • Ingredient: Black Pepper x 2 tbsp

    • Ingredient: Salt x 2 tbsp

    • Ingredient: Sugar x 2 tbsp

  • Burger Sauce x 1 tbsp

    • Ingredient: Mayonnaise x 8 c

    • Ingredient: Mustard x 6 c

    • Ingredient: Garlic Oil x 2 c

      • Sub-Ingredient: Garlic Clove x 2 lb

      • Sub-Ingredient: Oil x 4 c

    • Ingredient: Salt x 1 tsp

  • Salt x 0.125 tsp

  • Pepper x 0.125 tsp

Step 5:

Record yields, time spent per recipe, and the hourly wage of the employee who prepares each recipe.

  • Yield: 1 ct

  • Labor: Line cook @ $20/hr x 0.05 hour

  • Bun x 1 ct

  • Beef x 0.25 lb

  • Cheddar Cheese x 1 ct

  • Pickles x 3 ct

    • Yield: 800 ct

    • Labor: Cook @ $20/hr x 1 hour

    • Ingredient: Pickling cucumber x 50 lbs

    • Ingredient: Garlic clove x 0.25 lb

    • Ingredient: Salt x 10 tbsp

    • Ingredient: Water x 10 qt

    • Ingredient: Apple Cider Vinegar x 10 qt

  • Caramelized Onions x 2 oz

    • Yield: 350 oz

    • Labor: Cook @ $20/hr x 1 hr

    • Ingredient: Onion x 20 lb

    • Ingredient: Black Pepper x 2 tbsp

    • Ingredient: Salt x 2 tbsp

    • Ingredient: Sugar x 2 tbsp

  • Burger Sauce x 1 tbsp

    • Yield: 2 qt

    • Labor: Cook @ $20/hr x 0.15 hr

    • Ingredient: Mayonnaise x 8 c

    • Ingredient: Mustard x 6 c

    • Ingredient: Garlic Oil x 2 c

      • Yield: 1 qt

      • Labor: Cook @ $20/hr x 0.5 hr

      • Sub-Ingredient: Garlic Clove x 2 lb

      • Sub-Ingredient: Oil x 4 c

    • Ingredient: Salt x 1 tsp

  • Salt x 0.125 tsp

  • Pepper x 0.125 tsp

Step 6:

Record the purchase price and purchased amount for each ingredient. Converting between weight and volume for dry goods such as sugar, salt, and pepper may be necessary.

  • Yield: 1 ct

  • Labor: Line cook @ $20/hr x 0.05 hour

  • Bun x 1 ct ($20 for 40 ct)

  • Beef x 0.25 lb ($60 for 10 lb)

  • Cheddar Cheese x 1 ct ($20 for 40 ct)

  • Pickles x 3 ct

    • Yield: 800 ct

    • Labor: Cook @ $20/hr x 1 hour

    • Ingredient: Pickling cucumber x 50 lbs ($50 for 50 lbs)

    • Ingredient: Garlic clove x 0.25 lb ($25 for 5 lb)

    • Ingredient: Salt x 10 tbsp ($10 for 81 fl oz)

    • Ingredient: Water x 10 qt

    • Ingredient: Apple Cider Vinegar x 10 qt ($45 for 1 G)

  • Caramelized Onions x 2 oz

    • Yield: 350 oz

    • Labor: Cook @ $20/hr x 1 hr

    • Ingredient: Onion x 20 lb ($30 for 50 lb)

    • Ingredient: Black Pepper x 2 tbsp ($75 for 4 L)

    • Ingredient: Salt x 2 tbsp ($10 for 81 fl oz)

    • Ingredient: Sugar x 2 tbsp ($30 for 16 L)

  • Burger Sauce x 1 tbsp

    • Yield: 2 qt

    • Labor: Cook @ $20/hr x 0.15 hr

    • Ingredient: Mayonnaise x 8 c ($25 for 1 G)

    • Ingredient: Mustard x 6 c ($25 for 6 c)

    • Ingredient: Garlic Oil x 2 c

      • Yield: 1 qt

      • Labor: Cook @ $20/hr x 0.5 hr

      • Sub-Ingredient: Garlic Clove x 2 lb ($25 for 5 lb)

      • Sub-Ingredient: Oil x 4 c ($25 for 1 G)

    • Ingredient: Salt x 1 tsp ($10 for 81 fl oz)

  • Salt x 0.125 tsp ($10 for 81 fl oz)

  • Pepper x 0.125 tsp ($75 for 4 L)

Step 7:

Divide the cost of the ingredient by its quantity to find the cost per unit of measurement.

  • Yield: 1 ct

  • Labor: Line cook @ $20/hr x 0.05 hour

  • Bun x 1 ct ($20 / 40 ct = $0.50/ct)

  • Beef x 0.25 lb ($60 / 10 lb = $6.00/lb)

  • Cheddar Cheese x 1 ct ($20 / 40 ct = $0.50/ct)

  • Pickles x 3 ct

    • Yield: 800 ct

    • Labor: Cook @ $20/hr x 1 hour

    • Ingredient: Pickling cucumber x 50 lbs ($50 / 50 lbs = $1.00/lb) 

    • Ingredient: Garlic clove x 0.25 lb ($25 / 5 lb = $5.00/lb)

    • Ingredient: Salt x 10 tbsp ($10 / 81 fl oz = $0.12/fl oz)

    • Ingredient: Water x 10 qt

    • Ingredient: Apple Cider Vinegar x 10 qt ($45 / 1 G = $45/G)

  • Caramelized Onions x 2 oz

    • Yield: 350 oz

    • Labor: Cook @ $20/hr x 1 hr

    • Ingredient: Onion x 20 lb ($30 / 50 lb = $0.60/lb)

    • Ingredient: Black Pepper x 2 tbsp ($75 / 4 L = $18.75/L)

    • Ingredient: Salt x 2 tbsp ($10 / 81 fl oz = $0.12/fl oz)

    • Ingredient: Sugar x 2 tbsp ($30 / 16 L = $1.875/L)

  • Burger Sauce x 1 tbsp

    • Yield: 2 qt

    • Labor: Cook @ $20/hr x 0.15 hr

    • Ingredient: Mayonnaise x 8 c ($25 / 1 G = $25/G)

    • Ingredient: Mustard x 6 c ($25 / 6 c = $4.17/c)

    • Ingredient: Garlic Oil x 2 c

      • Yield: 1 qt

      • Labor: Cook @ $20/hr x 0.5 hr

      • Sub-Ingredient: Garlic Clove x 2 lb ($25 / 5 lb = $5.00/lb)

      • Sub-Ingredient: Oil x 4 c ($25 / 1 G = $25.00/G)

    • Ingredient: Salt x 1 tsp ($10 / 81 fl oz = $0.12/fl oz)

  • Salt x 0.125 tsp ($10 / 81 fl oz = $0.12/fl oz)

  • Pepper x 0.125 tsp ($75 / 4 L = $18.75/L)

Step 8:

Multiply the ingredient cost by the amount used in the recipe. Multiply hours worked by hourly wage. Again, some unit conversions may be necessary.

  • Yield: 1 ct

  • Labor: Line cook @ $20/hr x 0.05 hour = $1.00

  • Bun x 1 ct ($0.50/ct x 1 ct = $0.50)

  • Beef x 0.25 lb ($6.00/lb x 0.25 lb = $1.50)

  • Cheddar Cheese x 1 ct ($0.50/ct x 1 ct = $0.50)

  • Pickles x 3 ct

    • Yield: 800 ct

    • Labor: Cook @ $20/hr x 1 hour = $20.00

    • Ingredient: Pickling cucumber x 50 lbs ($1.00/lb x 50 lbs = $50.00) 

    • Ingredient: Garlic clove x 0.25 lb ($5.00/lb x 0.25 lb = $1.25)

    • Ingredient: Salt x 10 tbsp ($0.12/fl oz x 5 fl oz = $0.60)

    • Ingredient: Water x 10 qt

    • Ingredient: Apple Cider Vinegar x 10 qt ($45/G x 2.5 G = $112.50)

  • Caramelized Onions x 2 oz

    • Yield: 350 oz

    • Labor: Cook @ $20/hr x 1 hr = $20.00

    • Ingredient: Onion x 20 lb ($0.60/lb x 20 lb = $12.00) 

    • Ingredient: Black Pepper x 2 tbsp ($18.75/L x 0.03 L = $0.56)

    • Ingredient: Salt x 2 tbsp ($0.12/fl oz x 1 fl oz = $0.12)

    • Ingredient: Sugar x 2 tbsp ($1.875/L x 0.03 L = $0.06)

  • Burger Sauce x 1 tbsp

    • Yield: 2 qt

    • Labor: Cook @ $20/hr x 0.15 hr = $3.00

    • Ingredient: Mayonnaise x 8 c ($25/G x 0.5 G = $12.50)

    • Ingredient: Mustard x 6 c ($4.17/c x 6 c = $25.02)

    • Ingredient: Garlic Oil x 2 c

      • Yield: 1 qt

      • Labor: Cook @ $20/hr x 0.5 hr = $10.00

      • Sub-Ingredient: Garlic Clove x 2 lb ($5.00/lb x 2 lb = $10.00)

      • Sub-Ingredient: Oil x 4 c ($25.00/G x 0.25 G = $6.25)

    • Ingredient: Salt x 1 tsp ($0.12/fl oz x 0.17 fl oz = $0.02)

  • Salt x 0.125 tsp ($0.12/fl oz x 0.02 fl oz ≈ $0.00)

  • Pepper x 0.125 tsp ($18.75/L x 0.0006 L ≈ $0.00)

Step 9:

Total the ingredient and labor costs within each sub-recipe, and divide by the yield. Put this value by the yield of the sub-recipe. For now, ignore sub-recipes that have another sub-recipe within them.

  • Yield: 1 ct

  • Labor: Line cook @ $20/hr x 0.05 hour = $1.00

  • Bun x 1 ct ($0.50/ct x 1 ct = $0.50)

  • Beef x 0.25 lb ($6.00/lb x 0.25 lb = $1.50)

  • Cheddar Cheese x 1 ct ($0.50/ct x 1 ct = $0.50)

  • Pickles x 3 ct 

    • Yield: 800 ct ($184.35 / 800 ct = $0.23/ct)

    • Labor: Cook @ $20/hr x 1 hour = $20.00

    • Ingredient: Pickling cucumber x 50 lbs ($1.00/lb x 50 lbs = $50.00) 

    • Ingredient: Garlic clove x 0.25 lb ($5.00/lb x 0.25 lb = $1.25)

    • Ingredient: Salt x 10 tbsp ($0.12/fl oz x 5 fl oz = $0.60)

    • Ingredient: Water x 10 qt

    • Ingredient: Apple Cider Vinegar x 10 qt ($45/G x 2.5 G = $112.50)

  • Caramelized Onions x 2 oz 

    • Yield: 350 oz ($32.74 / 350 oz = $0.09/oz)

    • Labor: Cook @ $20/hr x 1 hr = $20.00

    • Ingredient: Onion x 20 lb ($0.60/lb x 20 lb = $12.00) 

    • Ingredient: Black Pepper x 2 tbsp ($18.75/L x 0.03 L = $0.56)

    • Ingredient: Salt x 2 tbsp ($0.12/fl oz x 1 fl oz = $0.12)

    • Ingredient: Sugar x 2 tbsp ($1.875/L x 0.03 L = $0.06)

  • Burger Sauce x 1 tbsp 

    • Yield: 2 qt

    • Labor: Cook @ $20/hr x 0.15 hr = $3.00

    • Ingredient: Mayonnaise x 8 c ($25/G x 0.5 G = $12.50)

    • Ingredient: Mustard x 6 c ($4.17/c x 6 c = $25.02)

    • Ingredient: Garlic Oil x 2 c

      • Yield: 1 qt ($26.25 / 1 qt = $6.56/c)

      • Labor: Cook @ $20/hr x 0.5 hr = $10.00

      • Sub-Ingredient: Garlic Clove x 2 lb ($5.00/lb x 2 lb = $10.00)

      • Sub-Ingredient: Oil x 4 c ($25.00/G x 0.25 G = $6.25)

    • Ingredient: Salt x 1 tsp ($0.12/fl oz x 0.17 fl oz = $0.02)

  • Salt x 0.125 tsp ($0.12/fl oz x 0.02 fl oz ≈ $0.00)

  • Pepper x 0.125 tsp ($18.75/L x 0.0006 L ≈ $0.00)

Step 10:

Move sub-recipe costs up to their parent recipes, starting with the most nested recipe (in this example the garlic oil.) Multiply these ingredient costs by the amount in the recipe. 

  • Yield: 1 ct

  • Labor: Line cook @ $20/hr x 0.05 hour = $1.00

  • Bun x 1 ct ($0.50/ct x 1 ct = $0.50)

  • Beef x 0.25 lb ($6.00/lb x 0.25 lb = $1.50)

  • Cheddar Cheese x 1 ct ($0.50/ct x 1 ct = $0.50)

  • Pickles x 3 ct ($0.23/ct x 3 ct = $0.69)

    • Yield: 800 ct ($184.35 / 800 ct = $0.23/ct)

    • Labor: Cook @ $20/hr x 1 hour = $20.00

    • Ingredient: Pickling cucumber x 50 lbs ($1.00/lb x 50 lbs = $50.00) 

    • Ingredient: Garlic clove x 0.25 lb ($5.00/lb x 0.25 lb = $1.25)

    • Ingredient: Salt x 10 tbsp ($0.12/fl oz x 5 fl oz = $0.60)

    • Ingredient: Water x 10 qt

    • Ingredient: Apple Cider Vinegar x 10 qt ($45/G x 2.5 G = $112.50)

  • Caramelized Onions x 2 oz ($0.09/oz x 2 oz = $0.18)

    • Yield: 350 oz ($32.74 / 350 oz = $0.09/oz)

    • Labor: Cook @ $20/hr x 1 hr = $20.00

    • Ingredient: Onion x 20 lb ($0.60/lb x 20 lb = $12.00) 

    • Ingredient: Black Pepper x 2 tbsp ($18.75/L x 0.03 L = $0.56)

    • Ingredient: Salt x 2 tbsp ($0.12/fl oz x 1 fl oz = $0.12)

    • Ingredient: Sugar x 2 tbsp ($1.875/L x 0.03 L = $0.06)

  • Burger Sauce x 1 tbsp ($26.83/qt x 1 tbsp = $0.42)

    • Yield: 2 qt ($53.66 / 2 qt = $26.83/qt)

    • Labor: Cook @ $20/hr x 0.15 hr = $3.00

    • Ingredient: Mayonnaise x 8 c ($25/G x 0.5 G = $12.50)

    • Ingredient: Mustard x 6 c ($4.17/c x 6 c = $25.02)

    • Ingredient: Garlic Oil x 2 c ($6.56/c x 2 c = $13.12)

      • Yield: 1 qt ($26.25 / 1 qt = $6.56/c)

      • Labor: Cook @ $20/hr x 0.5 hr = $10.00

      • Sub-Ingredient: Garlic Clove x 2 lb ($5.00/lb x 2 lb = $10.00)

      • Sub-Ingredient: Oil x 4 c ($25.00/G x 0.25 G = $6.25)

    • Ingredient: Salt x 1 tsp ($0.12/fl oz x 0.17 fl oz = $0.02)

  • Salt x 0.125 tsp ($0.12/fl oz x 0.02 fl oz ≈ $0.00)

  • Pepper x 0.125 tsp ($18.75/L x 0.0006 L ≈ $0.00)

Step 11:

Now, every ingredient line should be priced out. Add all these up to find the cost of the burger!

  • Yield: 1 ct ($1.00 + $0.50 + $1.50 + $0.50 + $0.69 + $0.18 + $0.42 = $4.79)

  • Labor: Line cook @ $20/hr x 0.05 hour = $1.00

  • Bun x 1 ct ($0.50/ct x 1 ct = $0.50)

  • Beef x 0.25 lb ($6.00/lb x 0.25 lb = $1.50)

  • Cheddar Cheese x 1 ct ($0.50/ct x 1 ct = $0.50)

  • Pickles x 3 ct ($0.23/ct x 3 ct = $0.69)

    • Yield: 800 ct ($184.35 / 800 ct = $0.23/ct)

    • Labor: Cook @ $20/hr x 1 hour = $20.00

    • Ingredient: Pickling cucumber x 50 lbs ($1.00/lb x 50 lbs = $50.00) 

    • Ingredient: Garlic clove x 0.25 lb ($5.00/lb x 0.25 lb = $1.25)

    • Ingredient: Salt x 10 tbsp ($0.12/fl oz x 5 fl oz = $0.60)

    • Ingredient: Water x 10 qt

    • Ingredient: Apple Cider Vinegar x 10 qt ($45/G x 2.5 G = $112.50)

  • Caramelized Onions x 2 oz ($0.09/oz x 2 oz = $0.18)

    • Yield: 350 oz ($32.74 / 350 oz = $0.09/oz)

    • Labor: Cook @ $20/hr x 1 hr = $20.00

    • Ingredient: Onion x 20 lb ($0.60/lb x 20 lb = $12.00) 

    • Ingredient: Black Pepper x 2 tbsp ($18.75/L x 0.03 L = $0.56)

    • Ingredient: Salt x 2 tbsp ($0.12/fl oz x 1 fl oz = $0.12)

    • Ingredient: Sugar x 2 tbsp ($1.875/L x 0.03 L = $0.06)

  • Burger Sauce x 1 tbsp ($26.83/qt x 1 tbsp = $0.42)

    • Yield: 2 qt ($53.66 / 2 qt = $26.83/qt)

    • Labor: Cook @ $20/hr x 0.15 hr = $3.00

    • Ingredient: Mayonnaise x 8 c ($25/G x 0.5 G = $12.50)

    • Ingredient: Mustard x 6 c ($4.17/c x 6 c = $25.02)

    • Ingredient: Garlic Oil x 2 c ($6.56/c x 2 c = $13.12)

      • Yield: 1 qt ($26.25 / 1 qt = $6.56/c)

      • Labor: Cook @ $20/hr x 0.5 hr = $10.00

      • Sub-Ingredient: Garlic Clove x 2 lb ($5.00/lb x 2 lb = $10.00)

      • Sub-Ingredient: Oil x 4 c ($25.00/G x 0.25 G = $6.25)

    • Ingredient: Salt x 1 tsp ($0.12/fl oz x 0.17 fl oz = $0.02)

  • Salt x 0.125 tsp ($0.12/fl oz x 0.02 fl oz ≈ $0.00)

  • Pepper x 0.125 tsp ($18.75/L x 0.0006 L ≈ $0.00)

Food Costing the Quick & Easy Way… with Spec

While the manual approach works (and sharpens your math skills!) it’s too time-consuming and error-prone to do on a regular basis. With Spec's food costing tools, you can simplify this process significantly.

Benefits of Using Spec for Food Costing:

  1. Automated calculations save time and reduce errors.

  2. Keep an eye on ingredient and labor costs in your sub-recipes.

  3. Update ingredient prices upon receiving them on an invoice.

  4. Automatic unit conversions.

  5. Cost your recipes and share them with staff in the mobile app so everyone is preparing recipes the same way. 


Take advantage of Spec's features to optimize your menu pricing and enhance profitability. Sign up for Spec's 30-day free trial and experience efficient food cost management firsthand!

Connor Welsh

After working as the bar manager at The Rosecomb and on the distributor side with AOC in Chattanooga, TN, Connor took his experience on both sides of the bar with him to Product Manager at Spec.

https://www.instagram.com/wilconwel/?hl=en
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