Theoretical vs. Actual Cost Calculator
Know what your sales should have consumed. Compare that expectation with inventory usage to find the gap—and separate documented usage from what still needs explaining.
Use ingredient costs only, matching inventory and sales periods, and current recipe prices. Enter food sales for food, liquor sales for liquor, and so on. Your entries stay in this browser when saved; they are not submitted to Jeff.
Food cost analysis
Illustrative food example — replace these entries with your own numbers.
1. Establish your theoretical cost
Enter the complete ingredient cost per serving and the quantity actually sold for every menu item in this category. Include modifiers and add-ons as separate rows when needed. The tool weights each recipe by its sales volume.
| Menu item | Ingredient cost per serving ($) | Quantity sold | Theoretical total | Action |
|---|
Do not average individual menu cost percentages. Quantities should represent sold servings; account for nonsales usage separately below.
Use sales-based theoretical cost before adding waste, comps, or employee meals. If your total already includes those events, do not enter them again as documented usage.
Need a recipe cost? Open the ingredient and yield calculator
Cost one serving or an entire batch. Use the same basis for every ingredient. For a batch, enter the finished number of servings below. Include sauces, oil, garnish and accompaniments; use tested usable yields.
| Ingredient | Purchase price ($) | Quantity purchased | Purchase unit | Usable yield (%) | Quantity in recipe | Recipe unit | Ingredient cost | Action |
|---|
US fluid ounces measure volume; ounces measure weight. They are not interchangeable. For a prepared sauce, enter its batch cost as the purchase price, its finished volume as purchase quantity, 100% yield, and the portion used. Normal trim or cooking loss belongs in yield; do not apply the same loss twice.
Adds a new menu row at full calculation precision. Enter its quantity sold. This is a snapshot; changing the recipe builder later does not update rows already added. Prep labor and overhead are outside this ingredient calculation.
2. Calculate actual inventory usage
Enter inventory values at ingredient cost, not menu selling prices. Required fields must include a value; use zero when appropriate.
Actual usage = beginning inventory + net purchases + transfers in − transfers out − ending inventory. Net purchases include credits and returns. Match inventory valuation and cutoff timing; labor and overhead are excluded.
Enter recorded waste, employee meals, comps, tastings or other usage not already included in theoretical cost. Value these at ingredient cost. This explains part of the gap; it does not remove the expense from actual usage.
3. Understand the gap
Enter your figures above to calculate results.
Percentage point gap = dollar gap ÷ net category sales × 100. Unexplained usage % = remaining difference ÷ actual usage × 100. These denominators are different. Signed results are retained; a negative number deserves investigation too.
How to review your results
Start with the largest dollar differences. Check inventory counts, receiving, transfers, recipe prices, tested yields, POS mappings and portions. Confirm that documented usage was counted once. A variance is a prompt to investigate, not proof of theft or guaranteed recoverable profit.
For food, monitor the total gap in percentage points of food sales. For beverages, also review product-level units and unexplained usage. Full bottles and cans should reconcile closely; draft beer needs a measured system-specific allowance for foam, line cleaning and keg changes. A category-wide result can hide individual product losses.
Use the accompanying article for benchmark context and definitions. Set expectations appropriate to your recipes, service model, and measurement method.