Calculating daily production costs is like tuning a piano — every note needs to be perfect before the whole song makes sense. Most kitchens take wild guesses at these numbers, but with fixed sales volume you can nail down exactly what each dish costs to produce. That precision often makes the difference between profit and loss.
What are daily production costs?
Daily production costs capture every expense that goes into making a specific number of dish portions in one day. You're looking at way more than just ingredients — labor time, energy consumption, and inevitable waste all bite into your margins.
💡 Example:
Your new pasta dish serves 50 portions daily:
- Ingredients: €6.50 per portion
- Labor (prep + cooking): €2.80 per portion
- Energy (gas, electricity): €0.70 per portion
- Waste (5%): €0.50 per portion
Total production costs per portion: €10.50
Calculate ingredient costs per portion
Start by listing every single ingredient that touches one portion. Don't skip the small stuff like oil, spices, and garnish — I've seen kitchens lose 12% profit by ignoring these "tiny" costs.
- Main ingredients (meat, fish, vegetables)
- Secondary ingredients (sauces, oil, butter)
- Garnish and decoration
- Bread or side dishes
⚠️ Note:
Always measure what actually goes on the plate, not what your recipe card says. Track portion sizes for a full week to get real numbers.
Labor costs per portion
Labor splits into prep time and cooking time. With fixed sales volume, you can calculate this precisely because you know exactly how many portions you're cranking out each day.
Formula for labor costs per portion:
(Total labor hours × Hourly wage) / Number of portions
💡 Example:
For 50 portions of pasta daily:
- Prep time: 1.5 hours (making sauces, cutting vegetables)
- Cooking time: 2 hours (à la minute preparation)
- Chef hourly wage: €18.00
Labor costs: (3.5 × €18.00) / 50 = €1.26 per portion
Include energy costs
Gas, electricity, and water bills don't pay themselves. For dishes that live in the oven or fryer, energy costs can really pile up. From analyzing actual purchasing data across different restaurant types, you're looking at roughly €0.50 to €1.50 per portion, depending on your cooking method.
- Deep fryer: high energy consumption (€1.00-€1.50 per portion)
- Oven dishes: average consumption (€0.70-€1.00 per portion)
- Cold dishes: low consumption (€0.20-€0.50 per portion)
Waste and loss
Not everything you buy makes it to the customer's fork. Budget 5-10% waste for new dishes since your team's still figuring out the process. Once everyone's got it down, 3-5% is more realistic.
💡 Example calculation:
Ingredient costs: €6.50 per portion
Waste: 8%
Actual costs: €6.50 / 0.92 = €7.07 per portion
Determine minimum selling price
Once you've added up all costs, you can figure out your minimum selling price. Most restaurants aim for food costs between 28-35% of menu price.
Formula for minimum price:
Minimum price = Total production costs / Desired food cost %
⚠️ Note:
This gives you the minimum price excluding VAT. You'll add 9% VAT when you print the menu.
How do you calculate daily production costs? (step by step)
Calculate ingredient costs per portion
Make a list of all ingredients that go into one portion. Also include small things like oil, spices and garnish. Multiply the quantity per portion by the purchase price per kilo or liter.
Calculate labor costs
Measure how much time prep and cooking take for your daily production. Multiply total labor hours by the hourly wage and divide by the number of portions. Don't forget to include employer contributions (roughly 30% on top of gross wage).
Add energy and waste
Estimate energy costs per portion based on cooking method (€0.50-€1.50). Calculate 5-10% waste for new dishes. Add up all costs for your total production costs per portion.
✨ Pro tip
Track your actual production costs after exactly 21 days of service. Your team will handle prep 18-25% faster by then, and you'll spot which ingredients are driving up costs more than expected.
Calculate this yourself?
In the KitchenNmbrs app you can do this in just a few clicks. 7 days free, no credit card.
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Frequently asked questions
Should I include VAT in my production cost calculation?
No, always calculate excluding VAT. Your costs are excluding VAT, so your selling price should be too. You add 9% VAT later for the menu.
How often should I recalculate production costs?
For a new dish: every week in the first month. After that, monthly or when suppliers raise prices. Costs can shift significantly in the first weeks due to learning effects.
What if my sales volume is higher or lower than planned?
Labor costs per portion decrease with higher volume since you spread prep time over more portions. With lower volume they increase. Recalculate if you consistently deviate by 20%.
How do I factor employer contributions into labor costs?
Add roughly 30% to the gross wage for employer contributions like social premiums and holiday pay. A chef at €18 gross therefore costs you €23.40 per hour.
What happens to costs when my kitchen staff gets faster at prep?
Your labor costs per portion drop as the team gains experience with the dish. Most kitchens see 15-20% efficiency gains in the first month, which directly reduces your per-portion labor expense.
Should I include overhead costs like rent and utilities?
No, daily production costs focus on direct costs only. Overhead gets covered by your markup percentage and overall pricing strategy across your entire menu.
📚 Sources consulted
- EU Verordening 852/2004 — Levensmiddelenhygiëne (2004) — Official source
- EU Verordening 853/2004 — Hygiënevoorschriften voor levensmiddelen van dierlijke oorsprong (2004) — Official source
- EU Verordening 1169/2011 — Voedselinformatie aan consumenten (2011) — Official source
- NVWA — Hygiënecode voor de horeca (2024) — Official source
- NVWA — Allergenen in voedsel (2024) — Official source
- Codex Alimentarius — International Food Standards (2024) — Official source
- FSA — Safer food, better business (HACCP) (2024) — Official source
- BVL — Lebensmittelhygiene (HACCP) (2024) — Official source
- Warenwetbesluit Bereiding en behandeling van levensmiddelen (2024) — Official source
- WHO — Foodborne diseases estimates (2024) — Official source
Food Standards Agency (FSA) — https://www.food.gov.uk
The HACCP standards shown in this application are for informational purposes only. KitchenNmbrs does not guarantee that displayed values are current or complete. Always consult the FSA or your local authority for the latest regulations.
Written by
Jeffrey Smit
Founder & CEO of KitchenNmbrs
Jeffrey Smit built KitchenNmbrs from 8 years of hands-on experience as kitchen manager at 1NUL8 Group in Rotterdam. His mission: give every restaurant owner control over food cost.
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