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Operations

COGS (Cost of Goods Sold)

The direct cost of ingredients used to produce sold menu items, expressed as a percentage of revenue. Industry benchmark: 28-32% for full-service, 25-30% for QSR. Plate cost feeds into COGS; menu pricing decisions impact COGS materially.

Related Terms

Operations
Plate cost
The total ingredient cost of producing one serving of a menu item. Includes the protein, sides, garnish, sauce, and consumables (oil, salt). Subtract plate cost from menu price to get contribution margin. Drives pricing decisions.
Operations
Contribution margin
​The dollar profit per item after subtracting plate cost from menu price. "$8 menu price minus $2.50 plate cost = $5.50 contribution margin." Distinct from gross margin (a percentage). Drives menu engineering recommendations.

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