What is the definition of Food Cost in a restaurant operation?

• A. Cost of food sold to customers
• B. Value of food that is given away, wasted, or stolen
• C. Revenue from beverage sales
• D. Price of ingredients purchased

Answer: (A)

Food cost is the expense tied to the ingredients that are used to prepare meals that are actually sold to guests. It represents the cost of food that leaves the kitchen as part of menu items customers purchase, not the total amount you bought or the revenue you earn. So the definition focuses on the cost of the food used in sold meals, not on purchases or on revenue from other items. The value of food given away, wasted, or stolen is tracked separately as waste or shrinkage, and does not define food cost. Likewise, revenue from beverages and the price of ingredients purchased are not the measure of food cost. In practice, you manage it by tracking the cost of ingredients used for sold items, which helps you gauge profitability and set pricing.