Gross profit margin per menu item = (menu price − plate cost) ÷ menu price × 100. A menu item priced at $18 with a plate cost of $5 yields a gross margin of 72.2%. Gross profit margin differs from food cost percentage in that it shows actual dollar contribution per item rather than cost as a share of price. MenuMargin ranks all menu items by gross profit margin, enabling operators to understand which items contribute the most dollar value per plate rather than the lowest cost ratio.
← Glossary
Gross Profit Margin
Revenue minus cost of goods sold, divided by revenue. Expressed as a percentage; the primary menu profitability metric.
Related terms
- Plate Cost — The total ingredient cost for a single prepared menu item, calculated from the cost per ingredient portion.
- Food Cost Percentage — The ratio of ingredient cost to menu price, expressed as a percentage. A key profitability benchmark.
- Menu Engineering — A framework for categorizing menu items by profitability and popularity to optimize item mix and pricing.