What is the formula for food cost percentage?

What is the formula for food cost percentage?

• A. Food sales divided by food cost
• B. Food cost divided by food sales
• C. (Food cost plus labor) divided by food sales
• D. Total sales divided by food cost

Answer: (B)

The main idea is to show what portion of sales goes toward the cost of the food itself. The food cost percentage is found by dividing the food cost by the food sales. In other words, it tells you how much of every dollar earned from selling food is spent on the ingredients used to make that food. Food cost is the cost of the ingredients consumed to prepare the menu items, while food sales are the revenue from those items. Using the inverse would describe sales relative to cost, not the portion of sales consumed by food costs, and mixing in labor or using total sales would distort the measurement.

The main idea is to show what portion of sales goes toward the cost of the food itself. The food cost percentage is found by dividing the food cost by the food sales. In other words, it tells you how much of every dollar earned from selling food is spent on the ingredients used to make that food. Food cost is the cost of the ingredients consumed to prepare the menu items, while food sales are the revenue from those items. Using the inverse would describe sales relative to cost, not the portion of sales consumed by food costs, and mixing in labor or using total sales would distort the measurement.