Menu Price Calculator

How to use this tool

1. Enter your per-item food cost from recipes or your food cost calculator.
2. Set your target food cost percentage.
3. Add optional packaging, direct labor, and other direct costs.
4. Review recommended price and psychological rounding options.
5. Compare against competitor pricing if helpful.

Formula explanation

Recommended price by food cost = food cost ÷ target food cost %. Total direct cost = food cost + packaging + direct labor + other direct costs. Estimated gross profit = recommended price − total direct cost. Gross margin = gross profit ÷ recommended price × 100.

Example calculation

Food cost is $4.50 and target food cost is 30%. Recommended price = $4.50 ÷ 0.30 = $15.00. With $0.50 packaging and $1.00 direct labor, total direct cost = $6.00. Gross profit = $9.00 (60% gross margin on direct costs).

What this means for your restaurant

Food-cost-based pricing gives you a floor — the minimum price that protects ingredient margin. Value-based and competitor pricing still matter for positioning, but you should never price below what your costs require without a deliberate strategy.

Common mistakes

• Applying target food cost to labor and packaging — those are separate direct costs.
• Ignoring takeout packaging and disposables on delivery-heavy items.
• Rounding down instead of up when using charm pricing.
• Matching competitor prices without knowing their cost structure.
• Setting one target food cost for every category.

Pro tips

• Use different target food costs by menu section if your mix varies.
• Test a small price increase on high-volume items before a full menu reprint.
• Pair food-cost pricing with contribution margin analysis on your best sellers.
• Document why premium items cost more — guests pay for story and experience too.