Have a Culinary Business? This is How to Calculate Food Cost, Can be Manual and Use Excel!

Doing a culinary business is not just about serving the best food or drinks to consumers. There are other basic things that can support continuity culinary business, namely related to business financial calculations.

One of the most crucial calculations is cost of goods sold (HPP) food or often also referred to as food costs. This food COGS calculation is useful for knowing the total capital needed to obtain a product.

Not only that, the HPP of food is also closely related to determination turnover inventory, profit margins, and the right price for the culinary products sold. Therefore, culinary business people need to understand the concept of calculating food COGS.

The following is a further explanation regarding how to calculate the COGS for food or food costs, either manually or automatically using Excel, along with formulas and calculation examples.

What is Cost of Goods Sold Food (Food Cost)?

Cost of goods sold (HPP) of food or food costs is the total cost incurred by a business to produce culinary products, whether food or beverages, in a culinary business or food and beverage (F&B).

Food costs become an important reference as a way to calculate the selling price of food until it is ready to be sold per portion. This food cost calculation is one of the most important indicators of a restaurant's profitability.

After value food costs It is known, culinary business actors can use it as a reference for making business decisions in the future.

Steps to Calculate Food Costs for Culinary Entrepreneurs

By understanding how to calculate food costs, culinary business people can organize and manage the business budget as effectively as possible, so that the culinary business can avoid the risk of bankruptcy.

The following are the steps for calculating food HPP that can be done by culinary businesses:

• First, pay attention to the basic components of the culinary business, namely the types of ingredients used and the amount used.
• Second, understand the calculation formula.

Sample case:

You are a shrimp-based culinary business owner. Your business has an initial supply of 2 kg of shrimp, at a price of IDR 100.000,00 per kg. So, it is known that the initial inventory value is IDR 200.000,00.

Then, you decide to increase your stock of shrimp by 3 kg. So, it is known that the purchase of inventory is IDR 300.000,00.

After selling, there are 2 kg of available shrimp. So, it is known that the ending inventory value is IDR 200.000,00.

• Manual Calculation

If the COGS for food is calculated manually, the illustration of the calculation is as follows:

• Excel calculations

In addition to manual calculations, Food COGS can also be calculated automatically using assistance tools from Microsoft Excel. With Excel, food costs can be calculated more quickly and are avoided human error.

If the COGS for food is calculated using Excel, then the illustration of the calculation is as follows:

The formula used is (=E3+E4-E6), then press 'Enter'. That way, the HPP of food will be calculated automatically.

For the record, the method above is a simple calculation step. Furthermore, the calculation of the COGS for food can be done by taking into account the prices of production materials, transportation costs, other costs such as electricity and gas, packaging costs and production fees.

This is how to calculate the cost of goods sold (HPP) of food for culinary business people.