How to calculate the cost of a dish: formula, examples and common mistakes

Cost price is where every conversation about money in food service starts. It sets your menu price, your margin and how much you actually make on each sale. Yet it's often calculated once, at opening, and then left untouched for years. Let's look at how to calculate it properly and where people usually go wrong.

What goes into the cost of a portion

In food service, the cost price of a dish is the cost of everything that physically goes into one portion:

• ingredients from the recipe card — in the quantity you buy, not what's left after prep;
• sauces, spices, toppings — even if it's “just a pinch”;
• packaging and consumables: cup, lid, container, bag, napkin, stirrer.

Rent, wages and utilities aren't part of the portion cost — they're fixed costs and are counted separately.

The formula

The cost of a portion is the sum, across all ingredients, of:

quantity of the ingredient per portion × price per unit

The units have to match: if you buy milk by the liter but your recipe card lists milliliters, convert the price to rubles per milliliter — or the quantity to liters.

Example 1: a 300 ml cappuccino

Ingredient	Per portion	Purchase price	Cost
Coffee beans	18 g	1,900 ₽/kg	34.2 ₽
Milk	200 ml	90 ₽/l	18 ₽
300 ml cup	1 pc	7 ₽	7 ₽
Lid	1 pc	3 ₽	3 ₽
Sugar and stirrer	1 pc	1 ₽	1 ₽
Total			63.2 ₽

Notice that the cup, lid and sugar add up to 11 ₽ — almost a fifth of the cost. Leave them out and the drink looks more profitable than it really is.

Example 2: shawarma chicken and prep losses

Things get trickier with ingredients that lose weight during butchering and cooking. Say chicken thigh costs 450 ₽ per kilogram, and a shawarma portion takes 120 g of cooked meat.

The naive calculation gives 120 g × 450 ₽/kg = 54 ₽. But after trimming and frying, a kilogram of raw thigh leaves you with about 650 g — a prep loss of roughly 35%. So a kilogram of cooked chicken actually costs 450 ÷ 0.65 ≈ 692 ₽, and the 120 g in a portion costs about 83 ₽.

That's a difference of almost 30 ₽ on every portion. At a hundred shawarmas a day, it adds up to about 3,000 ₽ that simply doesn't show up when you calculate by raw weight.

That's why a recipe card lists two weights: gross — how much product is taken from stock, and net — how much is left after prep. Cost is calculated from the gross weight. Don't take the loss percentage from the internet — check it in your own kitchen: weigh the product before and after prep a few times and take the average.

From cost price to menu price

The easiest way to set a price is through a target food cost — the share of the price that goes to ingredients:

price = cost ÷ target food cost

For the cappuccino above, with a 25% target food cost, that's 63.2 ÷ 0.25 = 252.8 ₽ — on the menu it'll be 250–260 ₽.

Don't confuse markup with margin. With a price of 250 ₽ and a cost of 63.2 ₽:

• markup — (250 − 63.2) ÷ 63.2 ≈ 296%, meaning the price is almost four times the cost;
• margin — (250 − 63.2) ÷ 250 ≈ 75%, meaning 75 kopecks of every ruble of revenue are left to cover your other expenses and profit.

What counts as a healthy food cost is covered in detail in our article on food cost.

Common mistakes

• Calculating from net weight. The cost ends up understated by exactly the amount lost in prep.
• Forgetting packaging and small items. For drinks and takeaway food, packaging can be a noticeable share of the cost.
• Not updating purchase prices. Milk goes up 15%, the cost in your spreadsheet stays the same — and your margin quietly melts away.
• Eyeballing portions. If the barista uses 20 g of coffee instead of 18, the real cost is higher than calculated, and no formula will show it — only weighing and an inventory count will.
• Calculating it once. Cost price isn't a number, it's a process: revisit it every time prices or recipes change.

How to stop doing it all by hand

A spreadsheet works while you have only a few items and prices stay put. After that, people start forgetting to update it. In Crumble, the cost of every item is calculated automatically — from the recipe card and the cost of the ingredients in stock. And every sale immediately deducts ingredients according to the recipe card, so your stock levels match what you've actually sold.