A case invoice tells you what you bought. It does not tell you what each plate actually costs.
Use this guide to turn invoice data into serving-level decisions.
1) Context: Why Ingredient Costing Fails in Small Teams
Most costing errors come from three gaps:
- raw purchase quantity is used instead of usable quantity
- units are mixed across recipes (lb, oz, each)
- item cost is not refreshed after supplier changes
An ingredient cost calculator solves this only if the input discipline is consistent.
2) Table: Inputs You Need Before Running the Calculator
| Input field | Example | Common mistake |
|---|---|---|
| Purchase cost | $96.00 per case | Ignoring discounts/surcharges |
| Purchase amount | 30 lb case | Not converting to base unit |
| Loss rate | 12% trim loss | Using generic loss instead of item-specific |
| Amount used per serving | 4.5 oz | Portion drift not updated |
| Servings per batch | 20 | Batch yield guessed, not measured |
Bad inputs produce precise but wrong outputs.
3) Formula: Ingredient Cost per Serving
usableAmount = purchaseAmount x (1 - lossRate)
unitCost = purchaseCost / usableAmount
ingredientCostPerServing = unitCost x portionUsedRecipe rollup:
recipeCostPerServing = sum(all ingredientCostPerServing)
foodCostPercent = recipeCostPerServing / menuPrice4) Worked Example: Protein Cost Drift
Supplier invoice:
- Chicken case cost: $96.00
- Case amount: 30 lb = 480 oz
- Trim loss: 12%
- Portion per serving: 5 oz
usableAmount = 480 x (1 - 0.12) = 422.4 oz
unitCost = 96.00 / 422.4 = $0.2273 per oz
ingredientCostPerServing = 0.2273 x 5 = $1.14If you incorrectly skip loss rate:
unitCost_wrong = 96.00 / 480 = $0.20
ingredientCost_wrong = 0.20 x 5 = $1.00Difference: $0.14 per serving. At 8,000 servings per month, that is $1,120 of hidden cost.
5) Interpretation: What to Decide from Calculator Output
| Output signal | Operational meaning | Decision |
|---|---|---|
| Unit cost spike >5% week-over-week | Supplier volatility or spec change | Reprice high-volume items first |
| Large variance between theoretical and actual usage | Portion or prep control issue | Audit prep SOP and training |
| Stable recipe cost but weak margin | Channel deductions are rising | Re-evaluate delivery pricing separately |
| Frequent manual overrides | Data process is broken | Standardize item master fields |
6) Action: Weekly Ingredient Cost Control Routine
- Update top 20 ingredients by spend from latest invoices.
- Validate loss rates for proteins and produce.
- Recalculate top 15 selling recipes.
- Flag items where food cost moved by 2 points or more.
- Apply price changes or portion corrections immediately.
- Recheck after 7 days using realized sales mix.
7) Decision Rule
If the model says an item is under margin floor for two consecutive weekly cycles, treat it as a pricing decision, not a monitoring issue.
Related Guides
- Recipe Cost Calculator App (US, 2026)
- Menu Costing App for Restaurants (2026)
- US Ingredient Cost Calculator Guide (2026)
- Free Recipe Cost Calculator: Step-by-Step Formula