Convert batch work into direct labor cost
Use active work time and a loaded hourly rate appropriate to the business. A fictional batch taking 45 minutes at $24/hour costs $18 in labor. Over 30 saleable portions that is $0.60 each. Include preparation and cleanup that belong to the batch; do not automatically charge a full unattended overnight rest as paid labor.
List every item that leaves with the sale
A container at $0.28, lid at $0.09, label at $0.04, and bag allocation of $0.12 add $0.53 per order. Record whether one bag serves one portion or several. Dine-in and delivery should have separate packaging assumptions when their actual materials differ.
Keep overhead visible without double counting
Rent and general management usually belong to the operating period. A planning allocation of $3,000 monthly overhead across 2,000 portions is $1.50 each, but at 1,000 portions it becomes $3.00. The rent did not change; the allocation denominator did. Show that allocation separately from the costs that change directly with each sale.
Reconcile contribution with break-even
If an $8 net sale incurs $3.50 variable cost including fees, contribution is $4.50. Covering $3,000 fixed overhead requires at least 667 such sales because $3,000 ÷ $4.50 = 666.67. Do not subtract the allocated rent in contribution and then charge the same full rent again in break-even. For a mixed menu, use a realistic sales-weighted contribution.
Use your own operating data
Supplier prices, yields, labor rates, and channel fees change. KitchenMargin treats them as editable inputs rather than universal facts.