The total cost of food and beverage in a restaurant is calculated by using the stock take and purchase received. Purchases refer to all credit and cash purchases purchase returns/return outwards refer to any returns that have already been included under the heading of purchases.
When calculating the value of stock the normal practice followed in any establishment is to take the cost or market price whichever is less.
Costing sheet is a very useful record of food cost covering the entire range of dishes. These could be referred to for rechecking where there is any material change in the price of the ingredients. Let us assume that the price of an ingredient has increased, the cost of other ingredients being the same. In such situation both the total cost per portion and the food per portion will increase and gross profit percentage will decrease. To obtain the same amount of gross profit percentage it will be necessary to review the cost sheet and revise the selling price. Once again the food cost will be 40% of the selling price.