Food Cost Variance
Also called: theoretical vs actual food cost
What is Food Cost Variance?
Food cost variance is the difference between theoretical usage — what recipes say should have been consumed for the dishes sold — and actual usage measured by stock count. The gap is waste, over-portioning, theft or mis-costing.
Why Food Cost Variance matters
Food cost percentage tells you there is a problem; variance tells you where it is. It is the difference between a symptom and a diagnosis.
Food Cost Variance formula
Variance = Actual usage − Theoretical usage
Value it at cost and express it as a percentage of theoretical usage.
How Food Cost Variance works in practice
Run it per item on high-value ingredients weekly. A consistent gap on one ingredient points somewhere specific, while a small gap spread across everything usually means the recipe sheets need updating.
Worked example
Sales imply 42 kg of chicken but the count shows 48 kg used — a 6 kg variance worth about ₹1,500 at ₹250/kg.
Frequently asked questions
Over-portioning, waste, unrecorded staff meals, theft, or recipe sheets that no longer match how the dish is made.