Given opening inventory of 3,890; purchases of 74,381; closing inventory of 2,996; and sales of 233,479, what is the food cost percentage?

• A. 31.0%
• B. 32.2%
• C. 33.5%
• D. 34.9%

Answer: (B)

Food cost percentage is found by dividing the cost of food used (cost of goods sold) by the sales. The cost of goods sold is opening inventory plus purchases minus closing inventory.

Compute the cost of goods sold: 3,890 + 74,381 = 78,271; subtract 2,996 to get 75,275.

Now divide by sales: 75,275 / 233,479 ≈ 0.3224, or about 32.2%.

So the food cost percentage is 32.2%.