1. What Is Food COGS?

Food COGS (Cost of Goods Sold) represents the direct costs attributable to the production of the food sold by a restaurant or food business. It includes the cost of the ingredients and materials used to create the food items.

2. How Does The Calculator Work?

The calculator uses the Food COGS formula:

Where:

• \( \text{Beginning Inventory} \) — Value of food inventory at start of period
• \( \text{Purchases} \) — Additional food purchases during the period
• \( \text{Ending Inventory} \) — Value of food inventory at end of period

Explanation: This formula calculates the actual cost of food that was sold during a specific accounting period by accounting for inventory changes.

3. Importance Of Food COGS Calculation

Details: Accurate Food COGS calculation is essential for determining gross profit, setting menu prices, controlling food costs, and making informed business decisions in the food industry.

4. Using The Calculator

Tips: Enter all values in your local currency. Ensure beginning and ending inventory values are from the same point in time (e.g., start and end of month). All values must be non-negative.

5. Frequently Asked Questions (FAQ)

Q1: What should be included in food inventory?
A: Include all raw ingredients, prepared foods, and beverages that will be sold to customers. Exclude non-food items and supplies.

Q2: How often should I calculate Food COGS?
A: Most restaurants calculate Food COGS monthly to track performance and identify cost trends.

Q3: What is a good Food COGS percentage?
A: Typically 28-35% of food sales, but this varies by restaurant type and concept.

Q4: How do I value my inventory?
A: Use the cost you paid for the items (FIFO method is commonly used in the food industry).

Q5: What if my Food COGS seems too high?
A: High Food COGS may indicate waste, theft, incorrect portioning, or need for menu price adjustments.