1, selling price * (1 - gross margin) = cost.

2, the cost of dishes if only the purchase price of this value, is not the correct calculation. Considering the consumption of ingredients in the cooking process, the purchase cost must be combined with the cost of food in order to be calculated.

Expanded Information:

Cost Components

1. Raw materials, materials, fuel and other costs, which represent the value of the labor expended in the production of goods.

2, depreciation costs, the value of the means of labor (means) that have been expended in the production of goods.

3. Wages, which express the value created by the necessary labor of the producer.

Cost analysis

Research has found that effective cost analysis is an essential element of a company's success in a competitive marketplace. Inadequate cost analysis can lead to mere cost compression, which can lead to loss of business vitality. The establishment of a scientific and reasonable cost analysis and control system enables the enterprise's managers to clearly grasp the company's cost structure, profitability, and the right direction for decision-making, which becomes the key support for internal decision-making and fundamentally improves the enterprise's cost situation. According to PLUS Consulting, proper cost analysis plays a considerable role in whether a company is profitable or not. As a result of unfavorable cost analysis, a company may be caught in a long-term cycle of selling more and more at a loss due to pricing errors caused by failure to reasonably allocate costs to different products.

Cost Impact Role

1. Cost is the measure of compensation for the consumption of production.

2. Cost is the basis for setting product prices.

3. Cost is the basis for calculating the profit and loss of an enterprise.

4. Cost is the basis for decision-making.

5. Cost is an important indicator of the performance of the enterprise.

6, with the help of cost can reflect the country and enterprise economic activities in the "input" and "output" relationship. It is also a measure of the level of production and management of a comprehensive indicator, because it can reflect the high level of labor productivity, raw materials and labor consumption, equipment utilization, production technology and management level.

References:

China Ministry of Justice - Accounting Law of the People's Republic of China*** and the State of China (2017 Amendment)