Which costs belong in this quote?
Assume an independent kitchen quotes for one catering order. Food and individual packaging cost £3.00 per portion. A hired transport container costs another £36.00 per order, unchanged between 20 and 40 portions. These are invented teaching inputs, not supplier quotes.
All ordered portions are paid for. The £3.00 already reflects the chosen food-cost allowance, so no additional unsold-portion adjustment is needed. Waste in the calculator means unsold portions, not cooking yield.
Treat the container hire as a chosen direct order cost for this comparison. Include it once: allocating it across portions and then deducting it again from the order result would double-count it. Remaining wages, rent, energy and other excluded expenses still need paying.
Costs exclude recoverable purchase VAT and include non-recoverable VAT. Every customer price in this example assumes 20% sales VAT solely for arithmetic; this does not classify your catering supply. Calculations were checked using Python 3, retaining full precision and displaying money to pennies and percentages to two decimal places.
How much does each portion really cost?
Entered cost per portion = variable portion cost + fixed direct order cost ÷ paid portions.
For 20 portions: £3.00 + £36.00 ÷ 20 = £4.80 per portion.
For 40 portions: £3.00 + £36.00 ÷ 40 = £3.90 per portion.
The recipe has not become cheaper. The same £36.00 is spread across more paid portions. This allocation is valid only while that fixed cost stays unchanged. A second container or another delivery run would require a revised calculation.
Does a £12 price work for both quantities?
Net sale is the customer price before sales VAT. Gross profit is that net sale minus the entered cost. GP margin is gross profit divided by net sale, multiplied by 100.
Net sale = gross customer price ÷ (1 + VAT percentage ÷ 100).
At £12.00 including the assumed 20% VAT, net sale is £12.00 ÷ 1.20 = £10.00 per portion.
For 20 portions, gross profit is £10.00 − £4.80 = £5.20 each. GP margin is 52.00%, and order gross profit is 20 × £5.20 = £104.00.
For 40 portions, gross profit is £10.00 − £3.90 = £6.10 each. GP margin is 61.00%, and order gross profit is 40 × £6.10 = £244.00.
These results include the allocated container hire. They are gross profit against the stated cost scope, not net or take-home profit.
What price meets an illustrative 60% GP target?
Target gross customer price = entered cost ÷ (1 − target GP ÷ 100) × (1 + VAT percentage ÷ 100).
For 20 portions: £4.80 ÷ (1 − 0.60) × 1.20 = £14.40 per portion.
For 40 portions: £3.90 ÷ (1 − 0.60) × 1.20 = £11.70 per portion.
The 60% target is an example, not a recommended benchmark. Choose a target with regard to your own cost scope and remaining expenses. Recheck any rounded customer price: changing the quoted price changes the achieved margin.
Can you keep £12 and set a minimum quantity?
At £12.00 including the assumed VAT, the net sale is £10.00. An illustrative 60% GP target leaves a cost budget of £10.00 × (1 − 0.60) = £4.00 per portion.
After the £3.00 variable cost, £1.00 per portion remains to absorb the £36.00 fixed cost. Minimum quantity = £36.00 ÷ £1.00 = 36 paid portions.
At 36 portions, entered cost is £4.00, gross profit is £6.00 per portion and margin is exactly 60.00%. At 35 portions, margin is 59.71%, below the example target. Keep full precision when allocating costs; round a required whole-portion quantity upwards.
This shortcut requires a positive amount remaining after variable cost. If the permitted cost budget is no greater than variable cost, increasing quantity cannot absorb a positive fixed cost while meeting that margin. A mathematical minimum also does not establish customer demand or kitchen capacity.
How do you check and record your own quote?
Open GP Calculator UK at / and choose Check my GP. Enter cost 4.80, customer price 12 and assumed VAT 20 for the 20-portion order. Repeat with cost 3.90 for 40 portions. To reproduce the target prices, choose Find selling price and enter target GP 60 with each cost.
Record the confirmed quantity, fixed-cost allowance, cost scope and quote validity alongside your figures. Recalculate if the customer changes quantity or the fulfilment arrangements change. Use /methodology/ for calculation assumptions and rounding.
Use the VAT treatment applicable to the actual supply. HMRC’s catering guidance is at https://www.gov.uk/guidance/catering-takeaway-food-and-vat-notice-7091 . Purchase VAT recovery has conditions and exceptions, explained at https://www.gov.uk/charge-reclaim-record-vat/reclaim-vat-business-expenses . This guide explains quote arithmetic and does not provide personalised tax advice.
Sources
Try the tools
Try your own figures
Use the free GP calculator to check selling prices, compare margins and save menu items on your device. Gross profit is before remaining business expenses.
Open GP Calculator UK →