How to cost a dish step by step

Costing a dish is repeating the same simple process on every menu item. Once you systematize it, it stops being a monthly pain.

Step 1: write the standard recipe before touching a calculator

Costing a dish starts with a written standard recipe — exact gram weights per portion — before opening any spreadsheet. Without that document, every cook serves 180 g where 150 g should go and your margin evaporates without anyone noticing. In practice this means sitting down with the chef, cooking the dish once with a scale in hand and recording every ingredient in grams: 200 g of raw chicken breast, 30 ml of oil, 5 g of fine salt. Run the test three times and average the results. I've seen it in dozens of restaurants: the one that writes the standard recipe in the first month saves between 8% and 12% on food cost just by standardizing portions, without changing suppliers or the menu. The real unit cost is the price you pay the supplier divided by the net usable quantity, not the gross package quantity. If you buy 5 kg of sirloin at $48,000 COP per kilo, your gross cost is $48,000/kg.

Step 2: calculate the real cost per purchase unit

But if the supplier delivers with 4% unusable fat and 2% moisture lost on thawing, you are paying that kilo at $48,000 over 940 g of actual yield, which pushes the net cost to ~$51,060/kg. That 6% delta looks small, but applied to 300 weekly portions of 160 g it represents $5,400 COP of unrecorded weekly loss — more than $280,000 COP per month. Record cost per minimum unit of measure (gram, milliliter, unit) so recipe calculations are direct and free of manual conversions that introduce error. The trim factor converts gross purchased weight into net usable weight and is the step where most restaurants make the error of omission. The formula is simple: net weight = gross weight × (1 − trim %). A Hass avocado has between 30% and 35% waste between skin and pit; if you buy 1 kg at $6,500 COP, the real cost per 100 g of usable pulp is ~$10,000 COP, not $6,500.

Step 3: apply the trim/yield factor to each ingredient

Every ingredient has its table: round onion 15%, plum tomato 8%, raw tiger shrimp 45%. At Masterestaurant we use a trim table by category that we update every six months because cuts and suppliers change. Diego F. Parra recommends measuring trim at home with your actual inputs, not copying generic internet tables: a 5% difference in protein trim can move food cost between 1.5 and 2 percentage points. Cost per portion is the sum of (grams used × net cost per gram) for each ingredient in the standard recipe. For a dish with 12 ingredients, that lives in a three-column table: ingredient, recipe quantity (g or ml), net unit cost ($/g). The sum of the cost column is your raw material cost per dish. Add 3% to 5% for cooking and plating trim losses — liquid that evaporates, sauce left in the pan — and you reach the real on-plate cost.

Step 4: total the recipe cost and calculate cost per portion

If your wine-braised sirloin costs $14,200 COP in raw materials plus $600 in packaging, your recipe cost is $14,800 COP. That is the floor of your price: selling below it destroys margin even if every seat is full. Food cost percentage is (recipe cost ÷ selling price) × 100. The MASTERESTAURANT method starts from the target food cost: for most full-service restaurants, the sustainable range is 28% to 32%. With the recipe cost in hand, the minimum selling price is calculated as cost ÷ 0.32 (for a maximum food cost of 32%). For the sirloin at $14,800 COP cost, the minimum price is $46,250 COP; if you place it at $52,000 COP on the menu, your food cost is 28.5%, within the range. The trap I see over and over again: restaurants that set prices by intuition or by what the competition charges and end up with a food cost of 42%, covering only food but leaving no margin for payroll, rent, or profit.

Step 5: calculate food cost and set the selling price

The menu price must be a cash-flow decision, not a perception one. Systematizing the cost of an entire menu requires no expensive software: a spreadsheet with three tabs — inputs with updated prices, trim table, standard recipes — is sufficient for a 30-item menu. The workflow: update supplier prices once a week (10 minutes) and every recipe cost recalculates automatically. At Masterestaurant we have seen restaurants do this exercise for the first time and discover that between 4 and 7 items on their menu have a food cost above 38%, meaning they were subsidizing those dishes with the others. Identifying those dishes and correcting portions, recipes, or selling price in a single adjustment can move the restaurant's gross margin between 3 and 6 percentage points, without changing a single customer or supplier. The most expensive mistake Diego F. Parra documents in consulting is costing the dish using the supplier's list price without verifying the actual invoice: volume discounts, negotiated deals, and seasonal fluctuations can create differences of 10% to 20% between list price and the price actually paid.

Common costing mistakes and how to avoid them

Second mistake: not including 'small' ingredients like oils, spices, and base sauces because 'they're worth nothing,' when in a dish with 8 condiments those ingredients add between $800 and $2,200 COP per portion — equivalent to 1.5–4.5 food cost points. Third mistake: costing once a year. Animal protein prices in Colombia fluctuate up to 18% between January and August due to cattle cycles; if you don't update the costing every 30–45 days, your pricing decisions are based on stale figures and your margin erodes in silence. The cost of a dish is a living document: it should be reviewed every time a key input price changes by more than 5%, every time you adjust the standard recipe, and routinely every 30 to 45 days for proteins and every 60 to 90 days for dry goods. The most reliable warning signal is not the supplier's price: it's the actual month-end food cost compared to the theoretical one.

When to review and update your dish costing

If your theoretical food cost is 30% and the actual closes at 34%, there is a 4-point gap that may originate in oversized portions, unrecorded trim, theft, or outdated prices. Investigating that gap using recipe data versus actual consumption is the exercise that most quickly returns profitability in the restaurants Masterestaurant works with: in 70% of cases, simply correcting portions and updating costing recovers between $2 million and $5 million COP monthly in margin.

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Diego F. Parra — International consultant, expert in creating and scaling restaurants and in AI applied to restaurants, foodtech and HORECA. Methodology applied in 8.400+ restaurants across 43 countries · Expert in Artificial Intelligence applied to restaurants, hospitality and food businesses · 20+ years in restaurants, catering, large events and business growth · Author of the book «From Slave to Owner» (Amazon) · International keynote speaker for the HORECA sector.

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