How To Create a Cost Card
- Piece of Cake Staff
- Jan 8
- 5 min read
Written by Lindsay Grohs
Cost cards are behind the scenes of the recipes you read, the dishes you see, and the meals you eat. While they may seem intimidating, they’re important to understand, as they are the financial statements for dishes. This article will provide you with a step-by-step guide on how to create a cost card. Once you know the steps, it’s really just rinse and repeat. And as with most things, the more you practice, the better at it you’ll be. So let’s get into it!
Step 1: Define the Purpose
The first step in creating a cost card is defining the purpose behind it. What will the item be used for (prep, service, etc.)? What category does it fall under (appetizer, entree, or dessert)? And where might you serve this dish? Determining these things will allow you to fill out the first few lines of the cost card, including the recipe name and type.
Let’s do an example. Let’s say I’m making spaghetti and meatballs. I know that this dish will most likely be used for service and that it’s an entree. I also know that this dish can be served in Italian restaurants or family-style restaurants.
Step 2: Determine Your Yield & Portion Sizes
Next, you will want to determine how much of an item you are going to make. Is this cost card going to account for one serving or for multiple, and if so, how many servings? You will also need to determine what the portion size is for each serving.
For my spaghetti and meatballs, I’m going to create a cost card that accounts for 8 servings, with each serving being 6 oz cooked spaghetti, 3 medium meatballs (approximately 5 oz total), and ½ cup marinara sauce. If you were costing a sauce or dressing, you could list the serving size in cups or fluid ounces. If you were costing a protein or bulk item, such as meat or dough, you could use ounces or pounds as the serving size unit.
Step 3: List Your Ingredients
Next, you are going to want to plug in all your ingredients. You’ll put the name of each item in its respective “description” box, along with the quantity needed and unit of measure for each ingredient. Be sure that the quantities listed reflect the total amount needed to produce the full yield of the recipe. In my case, 8 servings. Accurately listing ingredients and their measurements is important for proper cost calculation, portion control, and consistency during service.
Step 4: Price Ingredients & Calculate Costs
Now comes the slightly hard part, calculating costs :(. With that being said, it sounds harder than it actually is. All you have to do is find the cost of the product you’re using and multiply the quantity by the price. Quantity used x Unit cost = Ingredient cost.
The most important step in doing this is to ensure your units are correct. Sometimes you will have to convert units, which can easily be done by looking it up on the internet or having a conversion cheat sheet with you. Other times, you might get lucky, and the company you work for may have a system that computes the cost for you after you list the ingredients, units, and quantities. Once you have calculated the individual ingredient costs, add them all together for the total recipe cost.
From this, you will also be able to determine the cost per portion by dividing the total recipe cost by the number of servings: Total recipe cost / Number of servings = Cost per portion
Step 5: Selling Price & Food Cost
Once the cost per portion has been calculated, the next step is to determine a selling price and calculate the food cost percentage of the item. To decide on an appropriate selling price, it is recommended to compare the cost of the dish to other items on the menu while also considering the quality and type of ingredients used. If the dish isn’t part of a specific menu, researching what your dish and similar dishes typically sell for across various venues can help establish a reasonable price. This price should also align with the overall purpose of the dish, as identified in step 1.
Food cost percentage is an important measure because it helps restaurants, or any food and beverage business, manage profitability, consistency, and efficiency. In the context of using cost cards and standardized recipes, food cost provides you with “a benchmark for managing profitability, setting menu prices, controlling efficiency, and monitoring supplier prices” (“Food Cost Percentage,” 2025). Ultimately, food cost matters because it directly affects profit, pricing, and the sustainability of a food operation. To find the food cost percentage of your item, you will divide the cost per portion by the selling price, then multiply it by 100: (Cost per portion / Selling price) x 100 = Food Cost %
The industry standard for food cost percentage is 28%-35%. While this range is a useful guideline, the final food cost should still align with the needs, goals, and concept of the restaurant or food operation.
Step 6: Write Your Recipe Method & Determine the Shelf Life
After all the costs have been calculated and prices determined, you can write the instructions for your recipe below the actual cost card. The recipe outline should clearly outline the preparation steps in order, using concise instructions and measurements. This ensures the recipe can be repeated consistently by anyone using the cost card.
For my example, spaghetti and meatballs, the recipe method would go something like this…
Bring a large pot of salted water to a boil and cook the spaghetti according to package instructions until al dente.
While the pasta cooks, prepare the meatballs by combining ground meat, breadcrumbs, eggs, seasoning, and herbs, then form them into evenly sized balls.
Cook the meatballs in a pan until browned and fully cooked through.
In a separate pot, heat the sauce and add the cooked meatballs, allowing them to simmer together.
Drain the pasta and combine with the sauce and meatballs.
Serve hot or portion and store according to proper food safety guidelines.
The shelf life should also be determined. Shelf life refers to how long the prepared dish can be safely stored before going bad. This includes proper storage instructions, such as refrigeration or freezing, as well as the length of time the item can be held under those conditions. Shelf life should also correlate with food safety guidelines. Determining shelf life helps with inventory control, reduces waste, and ensures food safety.
For spaghetti and meatballs, the shelf life would be up to 3-4 days refrigerated and up to 2-3 months frozen when stored in a sealed container.
Congratulations on learning how to create a cost card! I hope this article served as a helpful reference that you can return to when creating and costing recipes in the future. Using cost cards not only helps in managing profits but also makes recipe creation and preparation more organized and efficient. Best of luck with all your future cost cards and recipes!
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