Food cost variance is the difference between theoretical (ideal) food cost from recipes and sales, and actual food cost from purchases and stock counts. Theoretical food cost and actual food cost answer different questions. Theoretical asks what the recipes say you should have spent on the items you sold. Actual asks what left the storeroom. How a waste log sits next to that gap is waste and variance. AKLI keeps both figures, because a kitchen that only watches one of them is guessing.
Theoretical food cost
Theoretical cost = Σ (recipe cost of the item × quantity sold)
Theoretical % = theoretical cost ÷ food sales × 100
Recipe cost is the sum of ingredient quantities at weighted average cost, after yield. A new delivery at a new price moves that average. A 10 kg trim that becomes 8 kg of usable product is not an 8 kg price. Sub-recipes have to be costed first, then pulled into the dish. If the recipe cost is a number someone typed into a till two quarters ago, the theoretical figure is only as good as that memory. Recipe costing for groups is the maintenance problem. Costing one recipe, including yield and VAT, is how to cost a recipe.
Actual food cost
Actual food cost is the inventory formula: opening stock, plus purchases, minus closing stock, divided by food sales. It does not care what you meant to sell. It cares what was in the building. That inventory identity is the COGS formula. The percentage steps and a numeric example are in how to calculate food cost percentage.
Variance
Variance (SAR) = actual COGS − theoretical cost
A positive variance means you spent more than the recipes explain. That figure is money, in SAR when the books are in SAR. It is not percentage points. Percentage-point variance is actual food cost % minus theoretical food cost %. Typical causes, in the order they are worth checking:
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Waste and spoilage that never hit a waste log. If it left the stock without a sale or a waste entry, it sits in the variance.
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Portioning. The recipe says 180 g and the station serves 210 g. Theoretical stays flattering.
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Unrecorded comps, staff meals, and promo. The food left; the sale did not.
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A supplier price that is on the invoice and not yet on the recipe card, so theoretical is using last month’s cost.
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Missed or double counts. A bad closing inventory manufactures a variance that is not operational.
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Transfers between branches entered on one side only.
A negative variance (actual lower than theoretical) is not automatically good news. It can mean the count was high, sales were imported twice, or the recipe is costed with a price you no longer pay.
Why POS-only costing stops at theoretical
A cost field on a menu item, multiplied by items sold, is theoretical and only if that field is true. The till does not see the walk-in. AKLI can import a POS sales file or a CSV to get quantity sold, then compare it with stock, once you match sales quantities to recipes. You do not have to change POS. The side-by-side is AKLI versus POS-only costing.
How a multi-branch group should read it
Compare variance by branch before you compare it by dish. A group percentage can look calm while one site is carrying the waste. Then look at the dishes where recipe cost times sales is far from the ingredients those dishes use. That is the list a chef can walk to a station with.
AKLI is built to show that list from your own recipes, invoices, and counts. It is not a benchmark of other restaurants, and this site does not publish one. The published figures that do exist (what food service throws away, what it costs per tonne and per meal) are collected with their sources on the food cost and food waste statistics page.
Questions operators ask
What is food cost variance?
Food cost variance is the difference between theoretical (ideal) food cost from recipes and sales, and actual food cost from purchases and stock counts. On this page, variance equals actual COGS minus theoretical cost.
What is theoretical food cost?
Theoretical cost is the sum of each item’s recipe cost times quantity sold. Theoretical food cost percentage is that cost divided by food sales, times 100.
What is actual food cost?
Actual food cost is opening stock, plus purchases, minus closing stock, divided by food sales. It does not care what you meant to sell. It cares what was in the building.