![]() Prime cost is your most important key performance indicator. Prime cost does not include equipment and supplies, utilities, menu design, signage, decor or any other costs unrelated to the production of your product. Cost of goods sold is the raw material cost of your beverages and food, and labor cost includes actual labor, employee benefits, payroll taxes, healthcare, and bonuses. Prime cost is the sum of direct labor costs and the cost of goods sold (CoGS). Understand and Calculate Your Prime Costs ![]() After several months, you’ll know what to expect each month. These costs are harder to predict when opening a restaurant because they vary according to output. Variable costs include food, hourly wages, and utilities. ![]() These costs are easier to budget for when opening a restaurant because they don’t fluctuate much each month.
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