Food Cost Percentage

Joined Feb 17, 2003
Hello all,

I am working on a project at my place of employment, and I am hoping that you all can help me. I'm looking for the equation you use to determine the food cost in your operation.

I work in a retail operation, and I am trying to determine our true food cost. We incur alot of loss and we currently are running on the following formula:

Beginning Inventory+Purchase-Ending Inventory=Food Cost (in $).

This number is divide by our total sales for the period.

I am curious if we could get a more accurate food cost percentage since I have alot of items costed into my food cost at the retail price.

Thanks in advance.
Joined Dec 8, 1999
Could you describe what you mean by "retail operation"? This might answer my next question, which is why retail prices are being used to figure costs. I've worked in grocery store delis before. If we needed something, we could just go out in the store and get it. We then filled out a transfer slip for cost accounting purposes. We were charged cost for those items though, not retail.
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