What is the food cost percentage if the raw product cost is $0.95 and the selling price is $2.05?

To determine the food cost percentage, the formula to use is:

Food Cost Percentage = (Raw Product Cost / Selling Price) x 100%

In this scenario, the raw product cost is $0.95 and the selling price is $2.05. Plugging these values into the formula gives:

Food Cost Percentage = ($0.95 / $2.05) x 100%

Calculating this step-by-step:

1. Divide the raw product cost by the selling price:

$0.95 ÷ $2.05 ≈ 0.4634.

2. Multiply by 100 to convert to a percentage:

0.4634 x 100 ≈ 46.34%.

Rounding to the nearest whole number gives a food cost percentage of approximately 46%. This percentage indicates the proportion of the selling price that is made up of the cost of the raw products, which is valuable for budgeting and menu pricing decisions in food service operations. Knowing this percentage helps manage food costs effectively within a business.