How do you calculate profit on a recipe?
Calculate the batch ingredient cost, divide it by the number of servings, then add packaging and other direct costs per serving. Subtract that from the price you sell one serving for. Multiply by the number of portions to get the profit for the whole batch.
Batch profit = (price per portion × portions) − total batch cost
Batch profit tells you what a cook session is worth
Per-portion profit is easy to shrug at. Batch profit is not: a tray that makes $2.73-cost portions sold at $6.50 earns $30.20 across eight servings, and that is the number to weigh against the two hours it took.
If a recipe takes twice as long as another and earns the same per batch, that is a scheduling decision, not a pricing one.
Portions that do not sell are cost, not profit
If you routinely bin two of every twelve portions, your real cost per sold portion is the batch cost divided by ten, not twelve. Adjust the servings figure to what you actually sell.
Worked example
A tray of lasagne yielding 8 portions sold at $6.50 each:
- Total batch cost
- $21.80
- Cost per portion
- $2.73
- Price per portion
- $6.50
- Profit per portion
- $3.78
Profit per portion: $3.78. Total batch profit across 8 portions: $30.20, a 58.1% margin.
Frequently asked questions
Does this include my time?
No. This is profit before overhead — the money left after ingredients and direct costs. Comparing batch profit to the hours a recipe takes is a useful next step you can do on paper.
What if portions are different sizes?
Calculate each size as its own meal. A large and a regular portion of the same recipe are two different products with two different margins.