Theoretical vs. actual food cost
Also called: ideal vs actual · theo vs actual
Theoretical food cost is what your recipes say the period should have cost, given what you sold. Actual food cost is what inventory says it did cost. The difference — the variance — is waste, over-portioning, comps, spoilage and theft, and it is the only number that tells you those exist.
Theoretical food cost
Σ (plate cost of each item × units sold that period)
Your POS product mix report supplies the unit counts; your recipe costs supply the rest.
Worked example · One week, 1,240 covers
- Theoretical food cost (from PMIX × recipes)
- $11,180
- Actual COGS (from inventory)
- $12,690
- Food sales
- $41,400
- Theoretical food cost %
- 27.0%
- Actual food cost %
- 30.7%
- Variance
- $1,510 · 3.7pp
That is $78,500 a year, and none of it appears on any invoice. It is the most findable money in a restaurant.
Reading the variance
A variance of one to two points is normal operating friction. Three or more is a system problem worth a week of attention. Where to look, in the order that usually pays:
- Portioning. Weigh twenty plates of your top seller at random. Over-portioning by half an ounce of protein across a high-volume dish is the single most common cause.
- Recipe accuracy. If the recipe says 5 oz and the line plates 7, the recipe is wrong, not the cook. Fix the card.
- Comps and voids. Pull the comps report. Staff meals, remakes and manager comps are real cost that never hit a ticket.
- Waste and spoilage. A waste log for two weeks will tell you more than a month of guessing.
- Receiving. Short deliveries you signed for, and price increases you didn't catch — see invoice reconciliation.
- Theft. Look last, not first. It is real but it is far less common than the five causes above, and leading with it costs you a kitchen's trust.
Run the numbers
Ideal vs. actual variance calculator
The guide that works it through
Ideal vs. Actual Food Cost: Where the Variance Actually Hides
How to compute theoretical food cost from your POS mix, compare it against actual COGS, and work through the six causes of variance in the order that usually pays.
Related terms
Variance
The dollar gap between theoretical and actual food cost — the money that left without a sale.
Food cost percentage
The share of a dish's menu price consumed by the ingredients on the plate.
COGS (cost of goods sold)
The cost of the food and beverage actually consumed in a period, computed from inventory rather than from purchases.
Shrinkage
Inventory that disappears without a corresponding sale — waste, spoilage, error and theft combined.