Recipe costing

What it is and why it matters

With a standardized recipe you can cost every dish: how much each ingredient, the whole recipe and each portion cost. It's the basis for pricing and for adjusting the content of dishes.

You need four pieces of data per ingredient: the clean quantity the recipe uses, its unit of measure, its trim waste % and its purchase price in that same unit.

The formula

• Gross quantity = recipe quantity × waste factor
• Ingredient cost = gross quantity × purchase price
• Recipe cost = sum of the ingredient costs
• Cost per portion = recipe cost ÷ yield

What each value means

Recipe quantity

Clean, ready-to-cook quantity of each ingredient.

Purchase price

Price of the product as purchased, in the same unit as the quantity.

Yield

How many portions the recipe makes.

Share

What percentage of the total cost each ingredient represents.

Step by step

1. Columns 1 and 2: the ingredient and its unit of measure.
2. Column 3: the recipe quantity (clean).
3. Columns 4 and 5: the trim waste % and its factor.
4. Column 6: gross quantity = column 3 × column 5.
5. Column 7: the as-purchased price, in the same unit.
6. Column 8: cost = column 6 × column 7.
7. Add up the costs and divide by the yield to get the cost per portion.

Worked examples

Study notes

• Tip

  With each ingredient's share you can adjust the content: negotiate the price of the most expensive ingredients, review proportions (smaller main item, bigger side?) or substitute ingredients within good culinary practice.

• Common mistake

  Use the same unit for the price and the recipe: if you buy pears by the crate but the recipe uses kilos, convert the price to kilos.

• Tip

  Small savings per dish add up: $2 less on each of 10,000 units sold a month is $20,000 a month and $240,000 a year.