How does an operation typically determine its food cost?

The correct method to determine food cost involves calculating the total cost of food used during a specific period, and option A accurately describes this process.

To break it down, the calculation begins with the opening inventory, which is the value of food items available at the start of the period. Then, any purchases made during that period are added to this value to estimate the total food available for use. At the end of the period, the closing inventory, which represents the value of unsold food items remaining, is subtracted from the total food available. This gives the actual food cost incurred during the period.

Thus, the formula (Opening inventory + Purchases) - Closing inventory effectively provides the total food cost by accounting for what was available at the beginning, what was purchased, and what remains at the end, ensuring that only the cost of food that was used is taken into account. This is crucial for determining profitability and managing expenses in a food operation.