Sales Transfers From Bar Beer $150 Beer $12,000 Wine $1,100 Wine $34,000 Spirits

Question

Sales

Transfers From Bar

Beer

$150                              

Beer

$12,000

Wine

$1,100

Wine

$34,000

Spirits

$350

Spirits

$27,000

Employee Meals

$3,000

Transfers to Bar

$880

Beginning Inventory

Ending Inventory

Beer

$5,000

Beer

$3,500

Wine

$50,000

Wine

$51,000

Spirits

$7,000

Spirits

$5,800

Purchases

Beer

$3,700

Wine

$12,000

Spirits

$11,500

Calculate the cost of goods sold and sales percentages for beer, wine, and spirits (show your work; partial credit will be awarded) Assume that all transfers to the bar are assigned to the “spirits” column:

Beer cost of goods sold:

Beer cost %:

Wine cost of goods sold:

Wine cost %:

Spirits cost of goods sold:

Spirits cost %:

Total beverage COGS:

Total beverage cost %:

If the company standard is for a beer cost of 25%, a wine cost of 35% and a spirits cost of 30% would you say that this manager is doing a good job? Why or why not?

Sales

Transfers From Bar

Beer

$150                              

Beer

$12,000

Wine

$1,100

Wine

$34,000

Spirits

$350

Spirits

$27,000

Employee Meals

$3,000

Transfers to Bar

$880

Beginning Inventory

Ending Inventory

Beer

$5,000

Beer

$3,500

Wine

$50,000

Wine

$51,000

Spirits

$7,000

Spirits

$5,800

Purchases

Beer

$3,700

Wine

$12,000

Spirits

$11,500

Transfers Sales From Bar Beer 150 $12,000 Wine Beer 1,100 Spirits 350 34,000 Wine Spirits Employee Meals S3,000 Transfers to $830 Bar Beginning Inventory Beer Wine Spirits Ending Inventory Beer Wine Spirits 5,000 51,000 $5.800 7,000 Purchases Beer Wine Spirits $3,700 $12,000

Explanation / Answer

Particulars Beer Wine Spirits Total Opening stock $5,000 $50,000 $7,000 $62,000 Add purchase $3,700 $12,000 $11,500 $27,200 Add transfer frm bar $150 $1,100 $350 $1,600 Less closing stock $3,500 $51,000 $5,800 $60,300 Cost of goods sold $5,350 12100 13050 $30,500 Gross profit % (COGS/sales) 45% 36% 47% 41% Cost % (1- gross profit %) 55% 64% 53% 59% sales (A) $12,000 $34,000 $27,000 $73,000 Transfer to bar (B) 0 0 $880 $880 Total sales (A+B0 $12,000 $34,000 $27,880 $73,880 actual rate 55% 64% 53% Company standard rate of cost 25% 35% 30% Remarks The actual rate of cost is more than the company standard therefore the manager is not doing a good job

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