How to calculate the menu price of a restaurant dish
Menu price = portion cost ÷ target food cost × 1.10 for VAT (IVA). With €6.25 of ingredients and a 30% target, the price is €23.
In brief
- Cost is calculated on the served weight, after trimming and cooking losses.
- Dividing by 0.30 is the same as multiplying by 3.33.
- If yield is ignored, the tagliata in the example goes on the menu at €20 with an actual food cost of 34.4%.
What is the formula?
Menu price = portion cost ÷ target food cost × 1.10
The 1.10 factor adds the 10% VAT on food and beverage service (Agenzia delle Entrate, the Italian Revenue Agency).
How is the cost of a portion calculated?
- A written recipe, with weights.
- Purchase price from the latest invoice, excluding VAT.
- Yield: the part that reaches the plate after trimming and cooking.
- Cost = served weight ÷ yield × price per kilogram.
Example: the beef tagliata
| Ingredient | Quantity | Price | Cost |
|---|---|---|---|
| Sirloin (85% yield) | 220 g served | €22.00/kg | €5.69 |
| Arugula | 30 g | €8.00/kg | €0.24 |
| Grana cheese | 15 g | €16.00/kg | €0.24 |
| Oil, salt, vinegar | — | — | €0.08 |
| Portion cost | €6.25 |
ACRA calculation on sample purchase prices, excluding VAT.
6.25 ÷ 0.30 × 1.10 = €22.93. On the menu: €23, food cost 29.9%.
Is the calculated price enough?
It is the minimum that respects the income statement. Margin in euros and sales volume then come into play.
Contribution margin = price excluding VAT − portion cost
Tagliata at €23: 20.91 − 6.25 = €14.66.
Menu engineering (Kasavana and Smith, 1982) cross-references each dish's margin with the number of portions sold. Prices are recalculated at every change in supplier price lists: in August 2026, unprocessed food prices were 3.8% higher than a year earlier (Istat, Italy's national statistics institute).
Frequently asked questions
How is the selling price of a dish calculated?
Portion cost ÷ target food cost × 1.10. With €6.25 and a 30% target: €23.
Is the food cost of a dish calculated with or without VAT?
Without VAT (IVA). A €23 dish corresponds to €20.91 of revenue.
What is the contribution margin of a dish?
Price excluding VAT minus portion cost: what the dish leaves, in euros. For the tagliata at €23, it is €14.66.
New · ACRA Academy
ACRA Food Cost Pro
The cost of every dish and your actual monthly food and beverage cost, with supplier invoices loading by themselves. The file is in Italian.
Sources
- Tax rate of 10% VAT (IVA) on food and beverage service: Agenzia delle Entrate, ruling no. 412/2023 (in Italian).
- Prices of unprocessed food, August 2026: Istat, press release of September 16, 2026 (in Italian).
- Menu engineering: M. L. Kasavana and D. I. Smith, Menu Engineering: A Practical Guide to Menu Analysis, 1982.
- The tagliata example is an elaboration by AC Retail Advisory on hypothetical values.
Updated October 9, 2026.
Author
Andrea Calistri, founder of AC Retail Advisory. I have 20 years of experience in food retail and the food industry and have opened more than 200 locations. I have run operations for restaurant networks, served as CEO in Italy, France and the Netherlands, and advised restaurant chains and food companies as a consultant.
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