Can variance be negative? Yes, food cost variance can be both negative and positive. When calculating your variance, which we show you how to do below. Related post: 35 Reasons Why the Restaurant Failure Rate is So High Can Variance be Negative? This difference in actual food cost versus your expected food cost (also called standard food cost), is your food cost variance. So you start reviewing invoices and you notice that the pricing has changed significantly from what you would typically expect. (Restaurant groups and franchises typically have a process laid out for food costing.) If you’re like many of the restaurants we work with here at Orderly, you probably have invoices stacked high on your desk.Īnd if you’re like most of them, you probably only check food cost once a week or once a month. So what is food cost variance and how can you keep it under control? Below we’ve outlined what food cost variance (as called cost variance) is and a few ways you can keep it under control. But unfortunately, that’s not how the supplier industry works. In an ideal world, your food cost would be exactly what you expect every single time. Your supplier didn’t mention any major changes in price, so why should you have to worry? You’re getting a good deal after all, right?īut prices are seasonal, and will often change. How often do you check the prices of your ingredients?Įvery delivery? Once a week? Once a month? You’re expecting your food cost to be around a very specific number.

What does high cost variance mean