Short answer
Food cost is the ingredient cost of a dish divided by its selling price. It is usually wrong for four reasons: recipes still use old supplier prices, prep items like sauces are costed as free, modifiers change the price but not the ingredients, and waste is never recorded with a quantity and a value.
Is the dish still costed at an old supplier price?
If your dish cost still uses last month’s milk price, the report is already lying. Receiving stock at the real invoice price is what keeps margin current.
Are prep items counted in the dish cost?
A prep item is something you make in-house and use in other dishes: a sauce, dough, marinade, or syrup. It may have its own recipe. If it is treated as free, every dish using it looks better than it is.
Do modifiers move stock?
Oat milk, extra cheese, sauces, and sizes all change cost. If the option changes the price but not the ingredients, stock variance (the gap between the stock the system expects and the stock you count) shows up later as a mystery.
Is waste recorded with a quantity and a value?
Waste needs a quantity, reason, person, and money value. “We throw away a little” is not a cost control method.