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Cost & margin

Theoretical vs. actual food cost

By · Updated · Sources and editorial policy

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, theft and any error in the recipes and counts behind the two numbers.

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 %
27.00%
Actual food cost %
30.65%
Variance
$1,510 · 3.65 points

If every week looked like this, that would be $78,520 a year, and none of it appears on any invoice.

Reading the variance

Judge variance against your own history rather than a rule of thumb: it depends on how complete your recipes, sales mix and counts are, so two kitchens' figures are not comparable. A jump from your usual level, or a gap that grows period after period, is the signal. Where to look, starting with checks that need only a scale and paperwork:

  1. Portioning. Weigh twenty plates of your top seller at random. Half an ounce of extra protein adds up fast: at $8 a pound and 600 plates a week it is $150 a week.
  2. Recipe accuracy. If the card says 5 oz and the line has plated 7 for months, decide which is the spec and make the card match. A wrong card makes every theoretical number wrong.
  3. Comps and voids. Pull the comps report. Staff meals, remakes and manager comps are real cost that never hit a ticket.
  4. Waste and spoilage. A waste log for two weeks will tell you more than a month of guessing.
  5. Receiving. Short deliveries you signed for, and price increases you didn't catch — see invoice reconciliation.
  6. Theft. Look at it after the checks above, and with evidence: a gap concentrated in a few high-value items or on particular shifts that survives the other fixes. Leading with an accusation costs you a kitchen's trust.

Run the numbers

Ideal vs. actual variance calculator

Open it free →

The guide that works it through

Ideal vs. Actual Food Cost: Which Inputs Explain the Gap?

Compare reviewed recipe costs and manually supplied dish counts with inventory-adjusted period food cost, then check invoice, unit, portion and timing evidence.

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