What this calculation means
Target direct-cost pricing solves for the price that puts ingredient plus packaging cost at a chosen share of selling price.
No taxes, fees, labor, or other operating costs are added. The percentage is chosen by you, not recommended by the tool.
How to use this calculator
Enter ingredient and assignable packaging costs separately, then enter the target for their combined direct-cost percentage.
Formula and variables
Target price = (Ingredient cost + Packaging cost) ÷ (Target direct cost ÷ 100)
- Ingredient costUSD
- Food cost for the serving.
- Packaging costUSD
- Directly assignable packaging cost.
- Target direct cost%
- Target percentage, such as 30 for 30%.
Dollar amounts display to cents, with exact half-cent values rounded away from zero; intermediate calculations keep full precision.
Understand your result
The answer is a tax-exclusive price on the ingredient-plus-packaging scope. Separate ingredient and packaging subtotals and the chosen direct-cost target are shown for checking. It is different from an ingredient-only food-cost target.
Worked example
Ingredient plus packaging direct cost is $3.74; target direct cost percentage is 30%.
Ingredient cost: 3.5 USD
Packaging cost: 0.24 USD
Target direct cost: 30 %
- Combine $3.50 ingredients and $0.24 packaging = $3.74.
- Divide by the illustrative 0.30 target = $12.466666…; display $12.47.
Example result: $12.47
Frequently asked questions
Can I compare this percentage with an ingredient-only target?
Label the scopes first. Adding packaging to the numerator changes the ratio, so the two targets are not interchangeable without that distinction.
Does the result guarantee a profit?
No. The selected direct-cost target does not establish demand, revenue, or coverage of costs outside the two entered categories.
Why can a calculator that adds packaging after pricing give a different answer?
Applying a target to ingredient cost first and then adding packaging uses price = ingredients ÷ target + packaging. This page applies the target to both categories: price = (ingredients + packaging) ÷ target. At $3.50 ingredients, $0.24 packaging and a chosen 30% target, those are $11.91 and $12.47 respectively. Select the method that matches your stated cost scope; do not treat the percentages as interchangeable.