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Feature Guides
Menu Costings
Complete guide to pricing, quantities, labour, custom fields, allergens, and reports in costings
45 min read
Complete guide to pricing, quantities, labour, custom fields, allergens, and reports in costings
Costings are where you bring everything together – turning your recipes into priced menu items with profit margins. This comprehensive guide covers creating costings, markup and pricing, managing quantities, tracking labour costs, and using custom fields.
By the end of this guide, you'll know how to:
Before creating a costing, you need:
Tip: If you haven't created products yet, see Understanding Products.
For this guide, gather:
Let's create a simple lunch menu costing.
Fill in the costing details:
For our example: Café Lunch Menu
For our example: 200% (triple the cost, 66.7% margin)
What's a Good Markup? Food service businesses typically use 200-300% markup (66-75% margin) to cover food cost, labor, overhead, and profit.
For our example: Leave as regular costing
Now add products to your menu. Click Add Item for each product.
1 (one serving)MenuM8 Calculates:
1MenuM8 Calculates:
1MenuM8 Calculates:
1 (one slice)300% (desserts often have higher markup)MenuM8 Calculates:
Flexible Markup: Use global markup for most items, but override for specific items like desserts, beverages, or specials that have different profit targets.
MenuM8 automatically calculates totals:
Item Costs:
Total Cost: £6.21 (cost to produce all 4 items)
Selling Prices:
Total Revenue: £19.44 (if you sell all 4 items)
Total Profit: £13.23 Average Margin: 68.1%
Tags help organize costings:
For our example: Add tag "Lunch Menu"
Your First Costing is Complete! You now have a priced menu with profit margins calculated automatically. You can generate reports, adjust pricing, and use this costing as a template for similar menus.
Markup and margin are two different ways to calculate selling prices. Understanding the difference is critical for profitable menu pricing.
Markup is the percentage added to the cost to determine the selling price:
Selling Price = Cost × (1 + Markup%)Example:
Cost: £10
Markup: 100%
Selling Price: £10 × (1 + 100%) = £10 × 2 = £20
You add 100% of the cost (£10) to the cost (£10) = £20
Margin (also called Gross Profit Margin) is the percentage of the selling price that is profit:
Margin% = (Selling Price - Cost) / Selling Price × 100Example:
Cost: £10
Selling Price: £20
Margin: (£20 - £10) / £20 × 100 = 50%
Half (50%) of your selling price is profit, half is cost.
Key Difference: Markup is based on cost (how much you add), margin is based on selling price (how much you keep). Same cost and price can have different markup and margin percentages!
Scenario:
As Markup:
As Margin:
Both Correct! Just different ways to express the same relationship.
Understanding the Difference:
Common Mistake:
❌ Wrong: "I want 50% profit, so I'll add 50% markup"
Cost: £10
Markup: 50%
Selling Price: £10 × 1.5 = £15
Margin: (£15 - £10) / £15 = 33.3% (Not 50%!)
✅ Right: "I want 50% margin"
Cost: £10
Formula: Selling Price = Cost / (1 - Margin%)
Selling Price: £10 / (1 - 0.5) = £10 / 0.5 = £20
Margin: (£20 - £10) / £20 = 50% ✓
| Markup % | Margin % | Cost | Selling Price | Profit |
|---|---|---|---|---|
| 25% | 20% | £10 | £12.50 | £2.50 |
| 50% | 33.3% | £10 | £15.00 | £5.00 |
| 100% | 50% | £10 | £20.00 | £10.00 |
| 150% | 60% | £10 | £25.00 | £15.00 |
| 200% | 66.7% | £10 | £30.00 | £20.00 |
| 300% | 75% | £10 | £40.00 | £30.00 |
| 400% | 80% | £10 | £50.00 | £40.00 |
Markup to Margin:
Margin% = Markup% / (1 + Markup%)
Example: 200% markup
Margin = 200% / (1 + 200%) = 200% / 300% = 66.7%
Margin to Markup:
Markup% = Margin% / (1 - Margin%)
Example: 50% margin
Markup = 50% / (1 - 50%) = 50% / 50% = 100%
MenuM8 Uses Markup:
Why MenuM8 Uses Markup:
Per-Item Markup:
Default Markup:
Typical Food Service Markups:
Why Variation?:
Same Markup for All Items:
Pros: Easy to implement, consistent pricing approach Cons: May overprice some items (lose sales), may underprice others (lose profit)
Different Markup by Category:
Why Different?:
Charm Pricing:
Prestige Pricing:
Sometimes you need to charge a specific price regardless of cost or markup.
Use locked prices for:
Example:
Result:
Locked Prices Override Markup: When you lock a price, MenuM8 ignores markup and uses your specified price. It still shows the resulting effective markup.
Warning: Locked prices don't update if costs change—monitor carefully! Regular review of locked prices vs. costs is essential.
Quantities in costings determine how many portions you're making and affect total costs and shopping lists. MenuM8 provides flexible quantity controls with both manual and automatic calculation options.
Each costing item has TWO separate quantity controls that work together:
The UOM Quantity specifies the amount for a single serving or portion:
Use Cases:
1 (full portion)0.5 (half portion)1.5 (one and a half portions)280 (280g serving)The Quantity specifies how many units to make:
Example: Half portions for 50 guests:
Product: Pad Thai
UOM Quantity: 0.5 (half portion)
Quantity: 50 (guests)
Total = 0.5 × 50 = 25 full portions worth of ingredients
Cost = £2.80 per portion × 0.5 × 50 = £70.00
Flexible Portioning: By separating UOM Quantity from Quantity, you can easily create half portions, large portions, or tasting portions while still tracking guest counts accurately.
The Quantity field can be set in four different ways:
Enter the exact number of portions needed:
Product: Caesar Salad
Quantity: 75 (manually entered)
Best For: Standard event planning where you know the exact count.
Quantity automatically equals the cumulative labour minutes across all items:
Products in costing have accumulated 120 minutes of labour
→ Quantity for this item = 120
Use Case: Labour overhead charge at £0.50 per minute
£0.50 × 120 = £60.00 overhead
Best For: Adding labour overhead costs that scale with total prep time.
Quantity automatically equals the value of a custom field:
Custom Field: "Number of Guests" = 75
Product: Main Course
Quantity: Calculated from "Number of Guests"
→ Quantity = 75
When you update the custom field to 80, quantity becomes 80.
Best For: Event costings where multiple items should match guest count.
Quantity equals the count of tags assigned to the item:
Item has tags: "Vegetarian", "Gluten-Free", "Premium"
→ Quantity = 3 (minimum 1)
Best For: Specialized use cases or automated categorization.
Named guest dish selections example: By creating a tag for each guest by name (eg "David", "Rebecca", "Janet", "Jack" etc) you can assign dishes by guest name tag and have the quantity update to the number of tags assigned. This is useful when you want to display the menu (in the Menu tab) grouped by the name of each guest. Prices and totals can also be calculated by group to display the total each guest needs to pay and the total amount.
To change how an item's quantity is calculated:
Dynamic Updates: When using calculated modes, quantities update automatically as underlying values change. Update the guest count custom field once, and all linked items recalculate instantly.
The total cost for each item combines both quantity fields:
Total Cost = Cost per UOM × UOM Quantity × Quantity
Example:
Product: Pad Thai
Cost per portion: £2.80
UOM Quantity: 0.5 (half portion)
Quantity: 50 (guests)
Total Cost = £2.80 × 0.5 × 50 = £70.00
Adjust UOM Quantity for portion variations:
| Scenario | UOM Quantity | Quantity | Total Portions |
|---|---|---|---|
| Full portions for 50 | 1 | 50 | 50 |
| Half portions for 50 | 0.5 | 50 | 25 |
| Large portions for 50 | 1.5 | 50 | 75 |
| Tasting portions for 50 | 0.25 | 50 | 12.5 |
Most Common:
Best For:
For Bulk Service:
Best For:
For Production:
Best For:
Estimating Quantities:
Example:
Event: 100 guests
Appetizer: 1 portion per person = 100 + 10% buffer = 110 portions
Main: 1 portion per person = 100 portions (no buffer on mains)
Dessert: 1 portion per person = 100 + 10% buffer = 110 portions
Buffet Service Factors:
Rule of Thumb:
Plated Service: 1 portion per person
Buffet (3 options): 0.5-0.75 portions per person per option
Buffet (5+ options): 0.4-0.6 portions per person per option
Example: 100 guests, 4 entree options
Each entree: 100 × 0.6 = 60 portions
Total: 240 portions for 100 guests (2.4 servings per guest on average)
Adding Buffer:
Why Buffer:
From Costing Quantities:
Aggregating Across Products:
Example:
Caesar Salad (50 portions): 10 kg romaine lettuce
Garden Salad (30 portions): 3 kg romaine lettuce
Shopping List: 13 kg romaine lettuce (total)
Event: 100 guests, 4-course meal
Course 1 - Appetizer: 100 portions
Course 2 - Soup: 100 portions
Course 3 - Main: 100 portions
Course 4 - Dessert: 100 portions
All same quantity (same guest count), but different products.
Main Course - Guest Choice:
- Chicken: 60 guests (60%)
- Salmon: 30 guests (30%)
- Vegetarian: 10 guests (10%)
Total: 100 guests
Costing includes all three with their respective quantities.
Per-Person Pricing:
Total costing cost: £500
Total guest count: 50
Cost per person: £500 / 50 = £10 per person
With markup (200%):
Price per person: £10 × 3 = £30 per person
Total price for event: 50 × £30 = £1,500
Tiered Pricing:
Labour is a significant cost in food service. Including labour costs ensures complete and accurate pricing.
Complete Cost Picture:
Example Without Labour:
Product: Handmade Ravioli
Food Cost: £4.50
Markup: 200%
Price: £13.50
Looks profitable, but...
Prep time: 45 minutes
Labour cost: £9.00 (at £12/hour)
True cost: £4.50 + £9.00 = £13.50
Actual profit: £0 (breaking even!)
Example With Labour:
Product: Handmade Ravioli
Food Cost: £4.50
Labour Cost: £9.00
Total Cost: £13.50
Markup: 200%
Price: £40.50
Now profitable! Food + labour covered with profit margin.
Critical Oversight: Ignoring labour costs is a common cause of unprofitability in food businesses. Complex dishes with high prep time may look profitable based on food cost alone but lose money when labour is factored in.
Labour Includes:
Labour Rate:
Example Labour Rates:
Prep Cook: £10/hour
Line Cook: £12/hour
Sous Chef: £15/hour
Head Chef: £20/hour
Fully Loaded (with taxes/benefits +30%):
Prep Cook: £13/hour
Line Cook: £15.60/hour
Sous Chef: £19.50/hour
Head Chef: £26/hour
MenuM8 tracks labour time automatically through a flow from inputs to products to costings:
Create inputs specifically for tracking preparation time:
You can create multiple labour time inputs for different types of work:
Add labour time inputs to products just like ingredients:
Product: Handmade Ravioli
Ingredients:
- Flour: 500g
- Eggs: 4 units
- Ricotta: 250g
Labour Time:
- Chef Prep Time: 45 minutes
MenuM8 automatically calculates labour time per output UOM for each product. This value:
Example:
Product: Pad Thai (makes 4 portions)
Labour inputs: 20 minutes total
Labour time per portion: 20 ÷ 4 = 5 minutes per portion
Products Expose Labour Time: Each product calculates and displays its labour time per output UOM. This is visible when adding items to costings and can be used for overhead calculations.
When you add products to a costing, MenuM8 automatically:
Example:
Costing: Weekend Menu
Products:
- Handmade Ravioli × 10: 5 min/portion × 10 = 50 minutes
- Caesar Salad × 10: 3 min/portion × 10 = 30 minutes
- Tiramisu × 10: 8 min/portion × 10 = 80 minutes
Cumulative Labour Time: 160 minutes (2:40)
The cumulative labour time can drive automatic cost calculations. This is powerful for allocating fixed overheads based on production time.
Your business has fixed monthly costs that need to be recovered through your pricing:
By calculating a cost per production minute, you can automatically allocate a fair share of these overheads to each costing based on how much labour time it requires.
Step 1: Determine monthly working minutes
The total available production minutes depends on your staff count:
Production staff: 2 chefs
Working days per month: 22 days
Hours per day: 8 hours
Minutes per day per person: 480 minutes
Total monthly production minutes: 2 × 22 × 480 = 21,120 minutes
Staff Count Matters: A kitchen with 3 production staff has 3× the available minutes compared to a solo chef. Adjust your calculation based on your actual staffing.
Step 2: Total your fixed monthly costs
Rent: £2,000
Finance/loans: £500
Insurance: £200
Equipment depreciation: £300
Utilities: £400
Total Fixed Overheads: £3,400/month
Step 3: Calculate cost per minute
Overhead per minute = £3,400 ÷ 21,120 = £0.16 per minute
Example:
Costing: Wedding Reception (100 guests)
Products add up to 3200 minutes of labour time
Fixed Overheads input:
- Cost per minute: £0.16
- Quantity: Calculated from Total Labour Time = 3200
- Overhead allocation: £0.16 × 3200 = £510.20
This event contributes £510.20 toward your monthly fixed costs. This cost can be marked up to make a profitable contribution towards your fixed costs.
Fair Allocation: Labour-intensive events that use more of your production capacity automatically bear a larger share of fixed overheads. Quick, simple events with less labour time pay less but also take up less of a share of your capacity, freeing you up to do other events. This ensures your pricing covers not just ingredients but your entire cost base.
Batch Prep (labour time in product recipe):
Individual Prep (labour time scales linearly):
Product: Caesar Salad (batch of 10)
Batch Prep (dressing, croutons, lettuce wash): 20 minutes
Per-Portion Prep (plating, garnish): 2 minutes each × 10 = 20 minutes
Total for batch: 40 minutes
Labour time per portion: 40 ÷ 10 = 4 minutes
In costing for 50 portions:
Labour time: 4 min × 50 = 200 minutes (3:20)
Calculate a blended rate across all kitchen staff:
Staff Mix:
- 2 Prep Cooks (£13/hour): 50% of time
- 1 Line Cook (£15.60/hour): 30% of time
- 1 Sous Chef (£19.50/hour): 20% of time
Blended Rate:
(0.50 × £13) + (0.30 × £15.60) + (0.20 × £19.50)
= £6.50 + £4.68 + £3.90
= £15.08/hour average (≈ £0.25/minute)
Use different labour inputs for different complexity levels:
Efficiency Strategies:
Example:
Before: Make each Caesar Salad individually (5 min each)
50 salads = 250 minutes = 4.17 hours = £62.50 labour
After: Batch prep dressing and components (40 min), plate individually (2 min each)
40 + (50 × 2) = 140 minutes = 2.33 hours = £35.00 labour
Savings: £27.50 labour cost (44% reduction)
Design Efficient Menus:
Per-Dish Labour:
Event-Based Labour:
Types of Labour:
Example:
Catering Event: 100 guests
Kitchen Prep: 10 hours × £15/hour = £150
On-Site Chef: 4 hours × £20/hour = £80
Servers (3 staff): 4 hours × £12/hour × 3 = £144
Setup/Breakdown: 4 hours × £12/hour = £48
Total Labour: £422
Per Person: £422 / 100 = £4.22 labour per guest
Batch Production:
Total Cost Pricing:
Product: Handmade Gnocchi
Food Cost: £3.00
Labour Cost: £6.00 (30 min at £12/hour)
Total Cost: £9.00
Desired Margin: 66.7% (200% markup)
Selling Price: £9.00 × 3 = £27.00
Value Perception:
Custom fields let you add extra information to costings beyond standard fields. This makes MenuM8 adaptable to your specific business model and workflow.
Standard Costing Fields:
Custom Fields Add:
Example Custom Fields:
Flexible Data: Custom fields make MenuM8 adaptable to your specific business model and workflow, allowing you to track exactly what matters to your operation.
Free Text Entry:
Example:
Field: Client Name
Value: "Smith Wedding Reception"
Field: Special Instructions
Value: "Bride is vegetarian, 3 guests with nut allergies, serve dessert at 9pm"
Numbers and Calculations:
Example:
Field: Guest Count
Value: 150
Event Planning:
Predefined Options:
Yes/No Options:
Setup (if feature available):
Using Custom Fields in Costings:
Fields appear:
One of the most powerful features is using custom fields to automatically set item quantities:
Example:
Custom Field: "Event Size" = 75
Product: Pad Thai
Quantity Mode: Calculated from "Event Size"
→ Quantity = 75 portions
Single Source of Truth:
Example Workflow:
Costing: Corporate Lunch
Custom Field: "Guests" = 50
Items (all using "Guests" for quantity):
- Appetizer: 50 portions
- Main Course: 50 portions
- Dessert: 50 portions
Client changes to 75 guests:
→ Update "Guests" to 75
→ All items automatically become 75 portions
→ Costs, shopping lists, and reports update instantly
Dynamic Costings: When you update a custom field value, all items with quantity calculated from that field recalculate automatically. This is perfect for event costings where guest counts may change.
You can use different custom fields for different items:
Custom Field: "Adult Guests" = 60
Custom Field: "Children" = 15
Items:
- Adult Main Course: Quantity from "Adult Guests" = 60
- Children's Menu: Quantity from "Children" = 15
- Appetizers: Quantity from "Adult Guests" = 60 (kids share)
- Dessert: Manual quantity = 75 (everyone)
Client Details:
Event Details:
Example Costing Header:
Costing: Smith Wedding
Client: John & Jane Smith
Event Date: December 15, 2024
Venue: Grand Hotel Ballroom
Guests: 150
Service: Plated Dinner
Extra Charges:
Example:
Food & Beverage: £4,500
Labour: £800
Delivery: £150
Setup: £200
Equipment Rental: £350
Service Charge (18%): £1,080
Subtotal: £7,080
Tax (20%): £1,416
Total: £8,496
Logistics:
Dietary & Preferences:
Example:
Standard Meals: 140
Vegetarian: 8
Vegan: 2
Gluten-Free: 5
Allergies: Guest #23 - severe nut allergy
Special: Bride's cake cutting at 9pm, champagne toast at 9:30pm
On Generated Job Sheet:
Costings are more than just pricing – they're planning tools. You can generate Shopping Lists, Job Sheets, and Menus from your costings.
Before generating reports, you can select which items to include. This gives you flexibility to generate reports for specific parts of your costing rather than everything.
In the costing editor, each item has a checkbox for selection:
The selection counter shows "Selected Items: X of Y items" so you always know what's included.
Your item selection flows through to all generated reports:
| Report | With Selection | Without Selection |
|---|---|---|
| Shopping List | Only ingredients for selected items | All ingredients for entire costing |
| Job Sheet | Only selected items with prep instructions | All items in costing |
| Menu | Only selected items displayed | All items in costing |
Selection is Saved: Your item selection is persisted with the costing. When you return to the costing later, your selection will be remembered.
Partial Orders:
Course-Specific Menus:
Kitchen Sections:
Testing and Quotes:
Example Workflow:
Full Wedding Costing: 15 items
Day 1 Prep (select 5 items):
- Generate Shopping List → Buy ingredients for selected items only
- Generate Job Sheet → Prep instructions for those 5 items
Day 2 Service (select all 15 items):
- Generate Menu → Complete menu for guests
Generate a shopping list to see exactly what to buy:
Example Shopping List for 50-Person Event:
Use For:
Create a production sheet for your kitchen:
Use For:
Generate a customer-facing menu:
Use For:
MenuM8 tracks and displays allergen information throughout your costings, helping you maintain compliance with food safety regulations and inform your customers about potential allergens.
Allergens follow a clear inheritance path through MenuM8:
INPUTS (Allergens assigned) → PRODUCTS (Allergens inherited) → COSTINGS (Allergens displayed)
When you create or edit an input (ingredient), you assign any applicable allergens:
When you build products (recipes) from inputs, MenuM8 automatically aggregates all allergens from the components:
Example: Pad Thai
Components:
- Rice Noodles (Gluten-free)
- Prawns (Crustaceans)
- Eggs (Eggs)
- Peanuts (Peanuts)
- Fish Sauce (Fish)
- Soy Sauce (Soya, Gluten)
Inherited Allergens: Crustaceans, Eggs, Fish, Gluten, Peanuts, Soya
This inheritance works recursively through component products too. If your Pad Thai uses a "Pad Thai Sauce" product, the allergens from that sauce flow up to the Pad Thai.
Each item in your costing displays its allergens:
When you add items to a costing, MenuM8 captures the allergen information at that moment. However, allergens in your inputs or products may change over time:
Important: Allergen data in costings does not update automatically. You must manually refresh allergens to get the latest information from your inputs and products.
To update allergen information for all items in a costing:
When to Refresh Allergens:
Each costing item displays its allergens with badge indicators:
When you generate a menu from your costing:
Example Menu Output:
Pad Thai
Rice noodles with prawns, egg, and peanuts in tamarind sauce
Contains: Crustaceans, Eggs, Fish, Gluten, Peanuts, Soya
£12.50
MenuM8 displays allergen names in the customer's language:
| English | German | French | Italian |
|---|---|---|---|
| Gluten | Gluten | Gluten | Glutine |
| Eggs | Eier | Œufs | Uova |
| Milk | Milch | Lait | Latte |
| Peanuts | Erdnüsse | Arachides | Arachidi |
When generating menus, select the appropriate language for your audience.
Accuracy is Critical: Allergen information is only as accurate as your input data. Always verify allergen assignments when adding or updating ingredients.
Best Practices:
Templates are reusable costing blueprints.
Create templates for:
Benefit: Start with a complete menu structure, customize as needed for each event.
Research industry standards:
Adjust markup to hit your targets.
Remember that food cost is only part of your total costs:
Your markup must cover all of these.
Consider price psychology:
Use locked pricing to set strategic price points.
Update costings when:
Set a monthly or quarterly review schedule.
For catering or custom events:
Start with 200-250% (66-71% margin) and adjust based on your market, competition, target customer, operating costs, and business model. Test different markups to find what works.
Yes! Use global markup for most items, then override for specific items (desserts, beverages, specials) that have different profit targets.
If cost calculations show low margins:
Options:
Yes:
Yes, you can enter 50.5 portions or 12.3 kg if needed. MenuM8 handles decimal quantities in both the UOM Quantity and Quantity fields.
UOM Quantity is the amount per unit (e.g., 0.5 for half portions, 280 for 280g servings). Quantity is the number of units to make. They multiply together: UOM Quantity 0.5 × Quantity 50 = 25 full portions worth of ingredients.
If you're using manual quantities, edit each item. Better: use a "Number of Guests" custom field and set items to calculate quantity from that field. Then you only update one number and all items recalculate automatically.
Add both options with their respective quantities (e.g., 60 chicken, 40 fish for 100 guests). You can use separate custom fields for each choice to make updates easier.
MenuM8 tracks labour time through labour time inputs added to products. Each product calculates its labour time per output UOM, and costings aggregate the total labour time across all items. You can then add a labour overhead item with quantity calculated from total labour time to convert time to cost automatically. You can also add labour time inputs directly to costings.
Yes! Quantity can be set in four ways: manual entry, calculated from total labour time, calculated from a custom field value, or calculated from the number of tags on the item.
Generally no. Labour cost typically reflects active prep and cooking time when staff is engaged. Oven time requires minimal supervision.
Typical: 5-15% depending on item criticality and waste tolerance. Appetizers and desserts can have more buffer than mains.
No! 200% markup means tripling the price (cost + 200% of cost = 3× cost). 100% markup = doubling.
Yes, custom fields can typically be added to existing costings. Edit the costing and fill in new custom field values.
Yes! Numeric custom fields can drive item quantities. Set an item's quantity mode to "Custom Field" and select the field. When the custom field value changes, the item's quantity and all related costs update automatically.
Contact Support:
You're Now Costing Like a Pro! With inputs, products, and costings mastered, you have everything you need to price menus profitably and generate professional reports. Keep refining your system as you learn more about your costs and margins.