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Food cost is not what you spent — it is what you used. Those are two very different numbers and confusing them is one of the most common mistakes food trailer operators make.

Here is the formula that runs everything in MyFoodCostIQ:

Opening Inventory + Purchases − Ending Inventory = Food Cost Dollars
Food Cost Dollars ÷ Net Sales = Food Cost %

These calculations assume accurate data entry. Results are only as reliable as the information you put in.

Your target is 25%. That means for every dollar coming in the door, 25 cents went toward the food and supplies that produced that sale. The remaining 75 cents covers your fixed costs — propane, insurance, event fees, loan payments — and what is left after that is your profit.

Here is the pattern every operator needs to understand:

Same amount of work. The only difference is your food cost percentage and your price. The higher your food cost percentage, the lower your profit on every single sale.

Fixed vs Variable Costs

Fixed costs stay the same whether you sell $10 or $10,000 — propane, insurance, licenses, loan payments, phone, commissary fees. Variable costs grow with sales but stay the same percentage. Food cost is a variable cost.

Breakeven

Fixed Costs ÷ (100% − Variable Cost %) = Breakeven Sales

You must know this number before you set a single price on your menu.

The percentages and benchmarks in this training represent general industry guidelines. Your actual results will vary.