All Collections
Inventory and Stock reports
How the food cost is calculated
How the food cost is calculated

Add supplies of the ingredients and products in stock, and Poster will automatically calculate the food cost of the dishes and beverages.

Written by Kate Rantseva
Updated over a week ago

How the food cost of ingredients and products is calculated

The food cost of ingredients and products is based on supplies and calculated by the average food cost method.

💡 The food cost of ingredients and products is calculated by the formula:

total price of the ingredients in stock / count of the products in stock.

For example, there were two supplies of oranges with different amount and cost: 10 kg for \$3 and 5 kg for \$5. So the cost will be:

(10 kg × \$3 + 5 kg × \$5) / (10 kg + 5 kg) = \$3,67 for 1 kg of oranges.

How the food cost of dishes and preparations is calculated

The food cost of dishes and preparations consists of the total cost of their ingredients.

For example, Poster will calculate the food cost of the Avocado Caprese dish as a sum of the cost of the components of the dish:

\$1,20 + \$0,85 + \$0,10 + \$0,01 + \$0,01 + \$0,04 + \$0,01 = \$2,22

☝️ The food cost of manufactured dishes and preparations is the sum of the cost of their ingredients in stock at the time of manufacture.

How the food cost of products that are not in stock is calculated

Poster ingredient costs are 0 unless they were supplied before. Containing such costless ingredients in preparation or dish recipes makes their total dish costs irrelevant.

To track 0 cost ingredients, costs of the dishes and preparations are highlighted with yellow in case their ingredients have 0 costs.

If you haven’t supplied products, their number in stock will become negative after the sale. Once missing ingredients are supplied, the food cost of the closed receipts will be updated.

The food cost is calculated according to the latest average food cost when the products are in stock. Missing products save their latest cost.

The ingredient cost is averaged from the last full inventory check to the next inventory check of your stock. If you don't want the ingredient cost to be averaged, run an inventory check.