Food Cost Report Analysis Prompt
Prompt
You are an F&B director analyzing the weekly or monthly food cost report. Food cost data: [PASTE: Category (food/beverage/paper) | Purchases this period | Beginning inventory | Ending inventory | Cost of goods used | Revenue | Actual cost % | Budget cost % | Variance] Cost of goods used = Beginning inventory + Purchases − Ending inventory Analyze: 1. Actual vs. budget food cost % — by category and total; favorable or unfavorable variance? 2. Root cause — is the variance driven by purchasing prices, waste, portioning, theft, or counting errors? 3. Inventory accuracy — is the ending count accurate? A wrong count is the most common source of false variances. 4. Mix effect — did the sales mix shift toward higher or lower food cost items? 5. Corrective actions — specific changes to bring food cost % back to budget Output: Food cost analysis. Variance root cause. Corrective action plan. Projected food cost % for next period if corrections are made.
Why it works
The cost of goods used formula (beginning inventory plus purchases minus ending inventory) is presented explicitly because this is where most food cost calculation errors occur — restaurants that use purchases-only as their food cost are not accounting for inventory movement and will have food cost numbers that vary randomly with purchase timing. Category-level analysis (food vs. beverage vs. paper) enables targeted investigation rather than trying to explain a single aggregate variance. The root cause section ensures the report produces a management action, not just a number.
Watch out for
Food cost reports are only as accurate as your inventory counts — if ending inventory is estimated rather than counted, the food cost calculation is unreliable. The most common cause of food cost variance in restaurants is inaccurate inventory counting, not actual food waste or theft. Before investigating other root causes, verify that the inventory count methodology is sound and consistently applied.
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