Which of the following is a KPI most directly used to measure ingredient costs relative to sales?

• A. Gross profit
• B. Food cost percentage
• C. Labor cost
• D. Order accuracy

Answer: (B)

Food cost percentage directly ties ingredient costs to sales, showing how much of every dollar from food sales is consumed by the ingredients used to make those items. It’s calculated by dividing the cost of ingredients used for food by the sales on food, then multiplying by 100. This KPI specifically isolates ingredient expense relative to revenue, helping you monitor purchasing efficiency, portion control, waste, and how menu pricing affects profitability.

Other options don’t isolate ingredient costs in relation to sales: gross profit reflects overall profitability after all costs, not just ingredients; labor cost focuses on payroll; and order accuracy is about receiving correctness, not cost relative to sales.