Food Cost Percentage Measures Cost Against PriceFood cost percentage expresses the selected food cost as a share of the selling price. A restaurant can also calculate a starting price from a target food cost percentage:Selling price = Food cost ÷ Target food cost percentageThe percentage must be converted to a decimal. Food used during a period can be estimated with:Food used = Beginning inventory + Purchases − Ending inventoryActual food cost percentage is:Actual food cost percentage = Food used ÷ Matching food sales × 100Suppose a restaurant begins the month with $5,000 in food inventory, purchases $14,000, and ends with $4,000:$5,000 + $14,000 − $4,000 = $15,000 of food usedIf matching food sales are $50,000:$15,000 ÷ $50,000 × 100 = 30%Inventory and sales must cover the same period and scope. Item A has the lower food cost percentage:$2 ÷ $8 × 100 = 25%Item B has a higher food cost percentage:$8 ÷ $20 × 100 = 40%Judged only by food cost percentage, Item A appears stronger. Food cost percentage compares selected food cost with selling price.