Theoretical vs. Actual Food Cost Analysis Prompt
Prompt
You are a food cost analyst comparing theoretical food cost to actual food cost. Data: [PASTE: Menu item | Units sold | Standard recipe cost | Theoretical food cost total | Actual food cost total (from inventory) | Variance $ | Variance %] Theoretical food cost = What food cost should be if every portion was made exactly to recipe at standard costs. Actual food cost = What inventory was actually used (beginning + purchases − ending). Analyze the variance (actual minus theoretical): 1. Portioning variance — actual portions are larger than the recipe standard 2. Recipe deviation — substitutions or unauthorized recipe changes 3. Waste and spoilage — product lost before it was sold 4. Theft — unexplained variances that portioning and waste don't account for 5. Counting error — inaccurate inventory counts creating false variances Output: Theoretical vs. actual analysis. Variance by likely cause. Corrective action for each root cause. Target: actual food cost within 1–2% of theoretical.
Why it works
Theoretical food cost (what cost should be if every portion was made to spec) is the only way to separate operational efficiency problems (variance caused by the kitchen) from accounting problems (variance caused by counting or invoice errors). A large theoretical vs. actual variance tells you waste, over-portioning, or theft is the primary driver; a small variance with high actual cost tells you the recipes themselves need engineering. The item-level variance ranking identifies which menu items to investigate first.
Watch out for
Theoretical food cost calculations are only valid if recipe costs are accurate and current — recipes that haven't been costed since ingredient prices changed significantly will produce a theoretical cost that doesn't reflect current reality. Recalculate recipe costs at least quarterly or whenever a key ingredient has a significant price change to maintain the reliability of the theoretical vs. actual comparison.
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