What is cost per drink and how is it calculated?

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Multiple Choice

What is cost per drink and how is it calculated?

Cost per drink refers to the amount spent on ingredients for each individual drink. To calculate it, add up all ingredient costs for the batch and then divide by the number of drinks produced. For example, if you spend $25 on ingredients to make 50 drinks, the cost per drink is $0.50. This measure is about ingredient costs, not the selling price. It isn’t just labor cost, and it isn’t a fixed value—changing the recipe or batch size changes the ingredient cost per drink. Knowing this helps you price drinks and assess profitability, since the ingredient cost per drink directly affects margins.

Cost per drink refers to the amount spent on ingredients for each individual drink. To calculate it, add up all ingredient costs for the batch and then divide by the number of drinks produced.

For example, if you spend $25 on ingredients to make 50 drinks, the cost per drink is $0.50. This measure is about ingredient costs, not the selling price. It isn’t just labor cost, and it isn’t a fixed value—changing the recipe or batch size changes the ingredient cost per drink. Knowing this helps you price drinks and assess profitability, since the ingredient cost per drink directly affects margins.

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