Act on the result
Assign the gap to a specific food, product, labour or scheduling review for the same period.
Educational only: Business decision support, not accounting, tax or legal advice.
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Update policy: Reviewed when formulas or official dependencies change.
Scope: Market-neutral small-business planning using your own assumptions.
What this planner helps you decide
Best for
Hospitality and product businesses controlling direct product and labour costs.
Outputs
Prime cost, prime-cost rate, operating headroom and the gap from target.
Start here
Use sales, COGS and direct labour from the same operating period.
Use a different tool when: Do not use this to set a menu price from recipe yield and loaded portion cost; use Menu Pricing Planner for that decision. Use this tool to control cost of goods and direct labour against sales.
Profit & break-even
Prime Cost: prime cost
Prime cost, prime-cost rate, operating headroom and the gap from target.
Amounts use the same currency as your inputs. No currency conversion is performed.
Prime Cost
Measure the share of sales consumed by cost of goods and direct labour, then quantify the target gap.
Your numbers stay in this browser
Use revenue for the selected operating period. Use one consistent ex-tax currency basis.
Use direct product or food cost for the same period. Use one consistent ex-tax currency basis.
Include wages and on-costs classified as direct operating labour. Use one consistent ex-tax currency basis.
Set the maximum share of sales for COGS plus direct labour.
Decision result
Every value is bound to the registered inventory or hospitality engine and keeps the decision components visible on one consistent basis.
- Prime Cost Ex Tax
- 110,000.00
- Prime cost rate
- 55%
- Operating Headroom Before Other Costs Ex Tax
- 90,000.00
- Target Prime Cost Ex Tax
- 110,000.00
- Prime Cost Gap Ex Tax
- 0.00
Scenario comparison
Each row names the assumption axis changed from the baseline.
ScenarioResultDifference
Current scenario55%Baseline
Lower Target prime cost rate55%0%
Higher Target prime cost rate55%0%
Save these results, change an input, then compare the updated figures with this baseline.
The baseline is temporary in this tab and is not added to shared scenario links or generated reports.
Calculation details
View calculation detailsView the formulas and inputs used for these results.
Prime Cost Ex Tax
Prime Cost Ex Tax
cost of goods sold + direct labour110,000.00Result110,000.00
Uses one consistent period, item basis and market-neutral ex-tax currency where money applies. The engine retains full precision; display rounding does not feed calculation.
Prime Cost Planner formulas →Inputs used by these formula steps
- Prime Cost Ex TaxSales Ex Tax
- 200,000
- Prime Cost Ex TaxCost Of Goods Sold Ex Tax
- 60,000
- Prime Cost Ex TaxDirect Labour Cost Ex Tax
- 50,000
- Prime Cost Ex TaxTarget Prime Cost Rate
- 0.55
Prime cost rate
Prime Cost Rate
prime cost / sales0.55 percentResult55%
Uses one consistent period, item basis and market-neutral ex-tax currency where money applies. The engine retains full precision; display rounding does not feed calculation.
Prime Cost Planner formulas →Inputs used by these formula steps
- Prime Cost RateSales Ex Tax
- 200,000
- Prime Cost RateCost Of Goods Sold Ex Tax
- 60,000
- Prime Cost RateDirect Labour Cost Ex Tax
- 50,000
- Prime Cost RateTarget Prime Cost Rate
- 0.55
Operating Headroom Before Other Costs Ex Tax
Operating Headroom Before Other Costs Ex Tax
sales − prime cost90,000.00Result90,000.00
Uses one consistent period, item basis and market-neutral ex-tax currency where money applies. The engine retains full precision; display rounding does not feed calculation.
Prime Cost Planner formulas →Inputs used by these formula steps
- Operating Headroom Before Other Costs Ex TaxSales Ex Tax
- 200,000
- Operating Headroom Before Other Costs Ex TaxCost Of Goods Sold Ex Tax
- 60,000
- Operating Headroom Before Other Costs Ex TaxDirect Labour Cost Ex Tax
- 50,000
- Operating Headroom Before Other Costs Ex TaxTarget Prime Cost Rate
- 0.55
Target Prime Cost Ex Tax
Target Prime Cost Ex Tax
sales × target prime-cost rate110,000.00Result110,000.00
Uses one consistent period, item basis and market-neutral ex-tax currency where money applies. The engine retains full precision; display rounding does not feed calculation.
Prime Cost Planner formulas →Inputs used by these formula steps
- Target Prime Cost Ex TaxSales Ex Tax
- 200,000
- Target Prime Cost Ex TaxCost Of Goods Sold Ex Tax
- 60,000
- Target Prime Cost Ex TaxDirect Labour Cost Ex Tax
- 50,000
- Target Prime Cost Ex TaxTarget Prime Cost Rate
- 0.55
Prime Cost Gap Ex Tax
Prime Cost Gap Ex Tax
prime cost − target prime cost-0.00Result0.00
Uses one consistent period, item basis and market-neutral ex-tax currency where money applies. The engine retains full precision; display rounding does not feed calculation.
Prime Cost Planner formulas →Inputs used by these formula steps
- Prime Cost Gap Ex TaxSales Ex Tax
- 200,000
- Prime Cost Gap Ex TaxCost Of Goods Sold Ex Tax
- 60,000
- Prime Cost Gap Ex TaxDirect Labour Cost Ex Tax
- 50,000
- Prime Cost Gap Ex TaxTarget Prime Cost Rate
- 0.55
Inputs used
- Sales
- 200,000.00
- Cost of goods sold
- 60,000.00
- Direct labour cost
- 50,000.00
- Target prime cost rate
- 0.55
Open this calculator with preset values
This calculator supports documented, shareable scenario URLs. Compatible assistants and applications can construct links using the parameters below.
Scenario links contain only allowlisted numeric and closed-choice inputs shown in the URL; Margin101 excludes free text and identifying fields. Anyone you share the URL with can read those numbers, so do not include private or identifying data.
| Parameter | Meaning | Unit | Allowed values | Presence | Default |
|---|---|---|---|---|---|
| costOfGoodsSoldExTax | Use direct product or food cost for the same period. Use one consistent ex-tax currency basis. | currency units/planning period, ex tax | 0 to 10000000 | Required | 60000 |
| directLabourCostExTax | Include wages and on-costs classified as direct operating labour. Use one consistent ex-tax currency basis. | currency units/planning period, ex tax | 0 to 10000000 | Required | 50000 |
| salesExTax | Use revenue for the selected operating period. Use one consistent ex-tax currency basis. | currency units/planning period, ex tax | 0 to 10000000 | Required | 200000 |
| targetPrimeCostRate | Set the maximum share of sales for COGS plus direct labour. | proportion of sales allowed for cost of goods sold plus direct labour | 0 to 1 | Required | 0.55 |
Prime Cost: prime cost
Use the target gap to locate how much COGS or direct labour must change before other operating costs.
Formula summary
- Primary formula
- prime cost / sales
Data used here
- The estimate uses your inputs and the general business formula documented in the methodology.
Decision checks
Stress-test the decision
Retest lower sales and higher direct labour before setting a cost-control target.
When this estimate can be misleading
- Demand, costs, lead times, tax and targets are user-entered scenarios; no market benchmark is embedded.
- Use one consistent item, period and ex-tax currency basis where money applies.
- This is educational business decision support, not accounting, tax, legal or financial advice.
- Use the target gap to locate how much COGS or direct labour must change before other operating costs.
Educational estimate, not advice. See all assumptions & limitations →
Related reading
Guides to interpret the decision and its assumptions.
- Restaurant Economics: From Menu Price to Operating Profit
Trace menu price through contribution, operating capacity and period costs without confusing a dish margin with operating profit.
Read guide
Frequently asked questions
How do I control cost of goods and direct labour against sales?
Assign the gap to a specific food, product, labour or scheduling review for the same period.
Which planning assumptions should I stress-test?
Compare a plausible alternative scenario and verify the decision-critical assumption that changes the plan most.