Cooked Mutton is a food item made from cooking raw mutton in a furnace, and has been used often in the Haunted series. Another version which has been seen is Jerky Mutton.
Cooked Mutton appears to be a favourite source of food for Grayson, as he has been seen carrying many pieces of mutton, which were mostly eaten by himself and Drake. Also, very few sheep have actually been seen in the area around Grayson's home, suggesting that they were killed for food. Day old mutton is not very good according to Grayson.