Food cost formula: a worked example in Tunisian dinars
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In short. Food cost percentage equals ingredient cost divided by the selling price excluding VAT, times 100. An ojja costing 6.730 DT and selling for 22.000 DT excluding VAT has a food cost of 30.6%. For a month, take opening stock plus purchases minus closing stock, then divide by sales excluding VAT.
The food cost formula has two inputs: what the ingredients cost, and what you sell the dish for excluding VAT. Divide the first by the second, multiply by 100, and you have the share of each sale that goes to your suppliers. This page applies it to an ojja in Tunisian dinars, then to a full month, then shows how to use it to set a price.
A note on the numbers. Tunisia counts in dinars and millimes, with 1,000 millimes to the dinar. We write 6.730 DT for six dinars and 730 millimes, and 80,000 DT for eighty thousand dinars. All prices below are examples, so replace them with your own invoices.
The food cost formula for one dish
Food cost (%) = ingredient cost of the dish ÷ selling price excluding VAT × 100
Ingredient cost includes everything that reaches the plate, down to the oil and the bread. The selling price must exclude VAT, because that money is collected for the state.
Worked example: one ojja merguez
One portion, costed line by line:
| Ingredient | Quantity | Purchase price | Cost |
|---|---|---|---|
| Merguez | 150 g | 28.000 DT/kg | 4.200 DT |
| Eggs | 2 | 0.400 DT each | 0.800 DT |
| Tomatoes | 200 g | 2.500 DT/kg | 0.500 DT |
| Peppers | 80 g | 3.000 DT/kg | 0.240 DT |
| Olive oil | 30 ml | 18.000 DT/L | 0.540 DT |
| Harissa, garlic, spices | Flat allowance | 0.250 DT | |
| Bread | 1 portion | 0.200 DT | |
| Total | 6.730 DT |
Sold at 22.000 DT excluding VAT, this ojja gives three numbers:
- Food cost: 6.730 ÷ 22.000 × 100 = 30.6%
- Gross margin: 22.000 − 6.730 = 15.270 DT per portion
- Multiplier: 22.000 ÷ 6.730 = 3.27
The percentage tells you whether the dish is priced in line with the rest of the menu. The margin tells you what pays the rent, and you cannot pay rent with a percentage. A dish at 40% with a large margin in dinars can be worth more to you than one at 25% with a small one.
Turn the formula around to set a price
Divide the ingredient cost by your target, written as a decimal. The same ojja at three targets:
| Target food cost | Calculation | Price excluding VAT | Gross margin |
|---|---|---|---|
| 28% | 6.730 ÷ 0.28 | 24.036 DT | 17.306 DT |
| 30% | 6.730 ÷ 0.30 | 22.433 DT | 15.703 DT |
| 33% | 6.730 ÷ 0.33 | 20.394 DT | 13.664 DT |
You would then round to a price that reads well on the menu, and add VAT for the price the guest pays. Ask your accountant which rate applies to your business. To try this on your own dishes, use the food cost calculator (in French).
How one price rise moves the result
Suppose merguez goes from 28.000 to 32.000 DT per kilo while your menu stays the same.
| Before | After | |
|---|---|---|
| Merguez, 150 g | 4.200 DT | 4.800 DT |
| Total ingredient cost | 6.730 DT | 7.330 DT |
| Food cost at 22.000 DT | 30.6% | 33.3% |
| Gross margin | 15.270 DT | 14.670 DT |
One ingredient, one supplier invoice, and nearly three points are gone. To hold 30.6%, the selling price would need to reach about 23.954 DT excluding VAT (7.330 ÷ 0.306). That is why your most expensive ingredient deserves checking on every invoice.
The monthly food cost formula
The dish calculation gives a theoretical cost. The monthly calculation shows what really happened, losses included.
Ingredient cost of the month = opening stock + purchases − closing stock
Example: 8,500 DT of stock on the 1st, 24,000 DT of purchases excluding VAT, 7,500 DT of stock at month end. Consumption is 25,000 DT. On sales of 80,000 DT excluding VAT, the food cost for the month is 31.25%.
The most useful number is the gap between the two. If your recipes predict 28% and the month shows 33%, five points of revenue went to waste, oversized portions, free dishes or stock errors. On 80,000 DT, that is 4,000 DT in one month.
What food cost should you aim for?
We found no published Tunisian benchmark. As a comparison, a US consultant writing in FSR Magazine gives about 25% for a quick-service burger, 35% for a family restaurant and 40% for a high-end steakhouse. The difference comes from the concept, the staffing and the price of the plate, so an American figure will not transfer to a Tunis menu.
Your own history is a better guide. Run the same calculation each month and watch the direction it moves. If you are opening and have no history yet, build the budget from your best sellers, as in our restaurant opening example or the plan for opening a cafe in Tunisia.
Five errors that distort the result
- Keeping VAT in the selling price. It lowers the percentage on paper and nowhere else.
- Ignoring yield. A sea bream at 30 DT/kg that loses half its weight when filleted really costs 60 DT/kg. Always divide the purchase price by the yield.
- Skipping small ingredients. Oil, spices, bread and sauces can add several hundred millimes to a plate.
- Using old prices. A recipe costed with last spring’s olive oil says nothing about today.
- Portioning by eye. If the recipe says 150 g of merguez and the plate gets 190 g, you are paying for 40 g nobody costed. At 28.000 DT/kg, that is 1.120 DT per plate.
Keeping the calculation alive
One dish is easy. A full menu gets heavy, because each invoice can touch several recipes, and a spreadsheet only stays right if someone updates it without fail.
In Tracer, recipes link to their ingredients, so costs are calculated automatically through sub-recipes and each recipe keeps a cost history. This is in every plan from Starter at 99 DT a month, billed annually. Our guide to restaurant management software shows the rest of the chain, from sale to stock.
Frequently asked questions
Should I use the price with VAT or without it?
Without it. VAT is collected for the state and is not your revenue. Leaving it in makes the selling price look higher, so your food cost looks lower than it really is.
What is the difference between food cost and ingredient cost?
Ingredient cost is an amount in dinars. Food cost is that amount as a percentage of the selling price excluding VAT. For our ojja, 6.730 DT and 30.6% describe the same fact in two ways.
How often should I recalculate food cost?
Recalculate a dish when a major ingredient changes price, and your overall figure at least monthly, after a stock count. Between counts, checking your most expensive products is usually enough to catch a drift.
Do staff meals and free dishes count?
They do not change the cost of a dish, but they do raise the monthly figure, because the stock is gone with no sale against it. Record them separately so you can tell them apart from real losses.