![]() ![]() ![]() This means that you sold $7,000 worth of inventory food. This gives you a usage cost, or COGS, of $7,000. ![]() The following Monday morning, you arrive at the restaurant and count $1000 worth of inventory. To find your COGS for a given time period, add the value of your beginning inventory and purchased inventory and subtract the value of your ending inventory from the result.įor example, if your restaurant has $5,000 worth of inventory on hand on Monday, and then purchases another $3,000 of food and beverage products, you have a total of $8,000 worth of inventory at the beginning of the week. Ending inventory: Once you get to the end of your time period, you calculate the monetary value of the inventory you have leftover.Purchased inventory: This is the monetary value of the inventory purchases you make for the upcoming time period.Beginning inventory: This is the monetary value of the inventory you have leftover from the previous period (day, week, month or year).To calculate COGS, you need the following three values for a given time period: Good news, in this post, you’ll learn the following: How do you calculate cost of goods sold for a restaurant? Restaurants who don’t control their COGS and monitor it regularly may put business in financial risk. One of the key component in restaurant business to control is cost of goods sold (COGS).ĬOGS is very important because it’s directly related to your restaurant profit margin, revenue and inventory management. COGS is how much it costs you to produce a menu item. Cost of goods sold is also referred to as “cost of sales.” ![]()
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