The total value of food in inventory on March 1 is $8,327. The facility purchased $3,200 of food during March. April 1 inventory value is $6,800. Total sales for the month of March were $10,538. What was the food cost percentage for the month of March?

• A. 64.5%
• B. 2.2%
• C. 45%
• D. 1.09%

Answer: (C)

Understanding how to set food cost percentage involves comparing the cost of food used during the period to the sales for that period. Start with cost of food sold for March: beginning inventory on March 1 plus purchases in March, minus ending inventory on April 1. That’s 8,327 + 3,200 − 6,800 = 4,727.

Next, divide the cost of food sold by the total sales for March: 4,727 ÷ 10,538 ≈ 0.4476, which is about 44.8%, rounding to 45%.

So the food cost percentage is 45%. This matches the typical way restaurants measure how much of sales are spent on food. The other numbers would result from using the wrong amount in the numerator or denominator (for example, not subtracting ending inventory, or dividing the wrong figure by sales).