Prime cost is a restaurant’s food and beverage cost plus its total labor cost, added together — the single most-watched number in restaurant profitability, typically targeted around 60% of sales or below. It combines the two largest controllable expenses into one figure, which is why operators steer by it. It’s only honest, though, when both halves are real: true food cost from recipes and counts, and fully-loaded labor including employer taxes. A prime cost built on wages-only labor or a guessed food cost understates the truth.
Related: fully-loaded labor cost · inventory variance
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