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Computing Cost of Food Sold

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7 views

Computing Cost of Food Sold

Uploaded by

jfbbutron00929
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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To compute the cost of food sold, you need to know the cost of the

ingredients used in the recipe. The cost of goods sold (COGS) is the sum of
all the costs that go into making a dish, including the cost of ingredients,
labor, and overheads 1. Here’s an example of how to calculate COGS:
Suppose you run a restaurant and want to calculate the COGS for a particular
dish. You would need to know the following information:

 Beginning inventory: The monetary value of the inventory you have


leftover from the previous period.
 Purchased inventory: The monetary value of the inventory purchases
you make for the upcoming time period.
 Ending inventory: The monetary value of the inventory you have left at
the end of the period.

Once you have this information, you can use the following formula to
calculate COGS:
COGS = Beginning Inventory + Purchases - Ending Inventory
For example, let’s say that at the beginning of a month, your restaurant had
$10,000 worth of inventory. During that month, you purchased $2,000 worth
of additional inventory. At the end of the month, you had $10,500 worth of
inventory left over. Using these numbers, we can calculate your COGS as
follows:
COGS = (540,000+ $108,000) – 567,000 COGS = 81,000

Therefore, your COGS for that month was 81,000. This is an important number to
know because it can help you determine how much to charge for your dishes and
whether or not your restaurant is profitable\

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