Meal costing tells you exactly what each dish costs to produce so you can price it profitably. This guide walks through every step, with a full worked example.
The core formula
Menu Price = Total Ingredient Cost ÷ Target Food Cost %
If a dish costs $4.50 to make and you target 30% food cost → sell it for $15.00
Write down every ingredient used to make one serving — including garnishes, sauces, and condiments. Be precise: a tablespoon of olive oil and a pinch of salt both have a cost.
Action: Use your standardized recipe. If you don't have one, make a new batch and weigh/measure everything.
Pull the invoice or receipt for each item. Convert bulk pack prices to the smallest usable unit (per gram, per ml, per piece).
Action: Unit price = Pack price ÷ Pack quantity. E.g. $8.40 for 1 kg chicken = $0.0084 per gram.
Multiply the quantity used in one portion by the unit price for each ingredient.
Action: Ingredient cost = Portion quantity × Unit price. Repeat for every item on your list.
Raw ingredients lose weight when trimmed, cooked, or prepped. A 1 kg chicken breast yields about 750 g after trimming — a 75% yield.
Action: Adjusted cost = Ingredient cost ÷ Yield %. For 75% yield: $1.20 raw cost ÷ 0.75 = $1.60 costed cost.
Divide the total ingredient cost by your target food cost percentage to get the minimum viable selling price.
Action: Menu Price = Total Ingredient Cost ÷ Target Food Cost %. Round up to a psychologically appealing number.
Let's cost a single portion of Grilled Salmon with roasted vegetables and lemon butter sauce.
| Ingredient | Qty | Unit Price | Yield % | Costed Cost |
|---|---|---|---|---|
| Salmon fillet | 200 g | $0.024/g | 90% | $5.33 |
| Zucchini | 80 g | $0.003/g | 95% | $0.25 |
| Cherry tomatoes | 60 g | $0.006/g | 100% | $0.36 |
| Butter | 20 g | $0.012/g | 100% | $0.24 |
| Lemon | ½ pc | $0.40/pc | 100% | $0.20 |
| Olive oil | 15 ml | $0.008/ml | 100% | $0.12 |
| Herbs & seasoning | — | — | — | $0.10 |
| Total ingredient cost | $6.60 | |||
Target food cost
30%
industry standard
Minimum menu price
$22.00
$6.60 ÷ 0.30
Suggested price
$23.95
rounded up
Yield percentage accounts for weight lost during prep — trimming fat, removing bones, cooking shrinkage. Ignoring yield leads to underpricing.
Yield % = Usable Weight ÷ Raw Weight × 100 Costed Ingredient Cost = Raw Cost ÷ Yield % Example: Raw salmon: 220 g at $0.024/g = $5.28 After trimming: 200 g → yield 91% Costed cost: $5.28 ÷ 0.91 = $5.80
Traditional restaurant costing tracks only ingredient cost per dish. Labor is tracked separately as a total percentage of revenue. However, for catering, home bakers, and food entrepreneurs pricing per-unit, including a labor factor is essential.
| Cost Type | Restaurant | Catering / Home Baker |
|---|---|---|
| Ingredient cost | ✓ Per dish | ✓ Per unit |
| Labor cost | % of total revenue | ✓ Per unit (hourly rate × time) |
| Overhead | Managed as fixed cost | ✓ Allocated per unit |
Forgetting small ingredients
Salt, oil, garnishes, and spice blends add up. Budget a $0.10–0.25 'mise en place' line per dish.
Using retail prices
Always cost from your wholesale invoices, not grocery store prices.
Skipping yield adjustment
Never cost raw weight as usable weight — you will always underprice.
Costing once and forgetting
Supplier prices change. Recheck every 3–6 months or after any major cost increase.
Ignoring portion creep
A recipe says 150 g but kitchen staff plates 180 g. That 20% over-portion erases margin silently.
How do you cost a meal?
List every ingredient, find the unit price for each, multiply quantity × unit price, add a yield factor for waste, total the costs, then divide by your target food cost % to get the selling price.
What is costing meals?
Meal costing is the process of calculating the exact ingredient cost for one serving of a menu item. It is the foundation of restaurant menu pricing.
How much should food cost be per meal?
Ingredient cost should be 28–35% of the selling price for most restaurants. If a dish costs $4.50, price it at $13–16 depending on your segment.
Do you include labor when costing a meal?
For restaurants, no — labor is tracked as a total % of revenue. For catering or home food businesses, yes — include hourly rate × prep time per unit.
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