Running a successful restaurant isn’t just about creating delicious dishes—it’s about making sure those dishes are profitable. Many restaurants struggle with pricing because they don’t have a clear view of their actual food costs. That’s where recipe costing comes in.

By breaking down every ingredient in your recipes and calculating the cost per serving, you can set prices that maximize profitability without surprising your customers.

Why Recipe Costing Matters

Food costs are one of the biggest expenses for any restaurant. Without visibility, you risk:

• Pricing dishes too low and losing money on every order
• Pricing too high and turning customers away
• Struggling to manage inventory and waste

Recipe costing gives you control. With accurate numbers, you can:

• Protect your margins
• Adjust prices when ingredient costs fluctuate
• Make smarter menu decisions (what to promote, what to cut)

Step-by-Step: How to Calculate Recipe Costs

Here’s a simple breakdown you can follow:

1. List all ingredients
   Write down every component used in the recipe, even small items like spices, oil, or garnishes.

2. Record purchase price and package size
   Example: $10 for 1kg of rice.

3. Determine unit cost
   Divide purchase price by package size:
   $10 ÷ 1000g = $0.01 per gram.

4. Multiply by recipe amount
   If the recipe uses 200g of rice, then:
   200 × $0.01 = $2.00.

5. Repeat for all ingredients
   Add them up to get the total recipe cost.

6. Divide by servings
   If your recipe makes 4 servings, then:
   $8 ÷ 4 = $2 per serving.

Setting Profitable Prices

Once you know your cost per serving, you can apply a markup to set your selling price.

A common approach is the food cost percentage rule:

• Desired food cost % = 30%
• Cost per serving = $2.00
• Selling price = $2 ÷ 0.30 = $6.67

Other considerations:

• Competitor pricing
• Customer perception of value
• Seasonal ingredient fluctuations

Use Our Free Online Recipe Cost Calculator

You don’t need to do the math manually—we’ve built a free tool to make recipe costing easy for you.

👉 Try the Free Online Recipe Cost Calculator

With this tool, you can:

• Input ingredient prices and quantities
• Get instant cost per serving
• Apply markups to recommend selling prices

It’s fast, accurate, and designed to help restaurants make better business decisions.

Conclusion

Recipe costing may seem tedious, but it’s one of the most powerful tools for restaurant profitability. By understanding the real cost of each dish, you can:

• Protect your margins
• Adjust quickly to changing ingredient costs
• Confidently set menu prices

Start today with our free recipe cost calculator and take the guesswork out of pricing.