Calculating Selling Price

Once you have calculated the recipe cost, the selling price per portion can be calculated using the following formula:

Example: We have determined that the cost per portion is $3.57, and the food cost percentage is 25% for your operations; the selling price would then be:

Tip: Determining food cost using food cost forms and comparing it to the actual food cost, based on inventory, is a good method of making sure that your operation is running efficiently.

Now you are going to do a practical exercise calculating selling prices.