Sudz Beer buys the necessary ingredients to brew and bottle one batch of beer for a...

Sudz Beer buys the necessary ingredients to brew and bottle one batch of beer for a total of $24,300. Each batch yields 75,960 bottles of beer. The cost per bottle is $0.32. They sell their beer to a distributor with a 35% markup, and then the distributor sells it to the retailer for a 41% markup. Because the retailer has a virtual monopoly on consumer sales, they get away with selling the beer at a 62% margin. What is the retail price of a case (24 bottles) of Sudz Beer?

Solutions

Expert Solution

Answer: $38.47

Solution & Explanation:-

Here, in this question we have to find Retailer Selling Price for 24 bottles of Sudz Beer.

So, first we calculate :

Per unit sales price = 0.32 × (1+ 35/100)

(where $0.32 is cost per bottle & 35% markup is sell to distributor)

Per unit sales price = 0.32 × 1.35

Per unit sales price = 0.432

unit margin = 0.432-0.32 = 0.11

Now,

Distributor per unit selling price(COGS) is

=0.432 × (1+ 41/100)

= 0.60912

(where 0.432 is per unit sales price & 41% markup is distributor sells to retailer).

Retailer Selling Price = COGS / (1-Margin%)

= 0.60912 / (1- 62/100)

= 0.60912 × 0.38

= 1.6029

Retailer Selling Price for 24 bottles of Sudz Beer :

1.6029 × 24

= $38.47

Rahul Sunny answered 1 year ago

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