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In: Economics

1. Consider the following revenue and cost data for Shannon’s Brewery in Keller, Texas. Shannon’s sells...

1. Consider the following revenue and cost data for Shannon’s Brewery in Keller, Texas. Shannon’s sells 35% of its craft beer production through its own on-premise taproom. The bulk of its sales (65%) are made off-premise via various retail outlets including supermarkets, bars, and restaurants. 40% of its of sales (on-premise and off-premise) consists of package sales (bottles and cans). Of this 40%, beer sold in cans accounts for 80% with sales of bottled beer accounting for the remaining 20%. Finally, the bulk of Shannon’s craft beer sales (60%) occurs in kegs (31 gallons per keg). Assume that overall sales for FY 2018 are expected to be $1351261. Given the proportions of beer sold in kegs, bottles, and cans, what will be the predicted dollar sales of beer sold in kegs? Round your answer to the nearest one dollar.

2. Assume the following costs in each of the categories identified in question one are:

Packaged (Cans & Bottles)

$121025

Kegs

$82885

Shrinkage/WIP Loss

$42,000

Contract Labor

$9,000

Direct Labor

$240,000

Freight

$18,000

Consumer Advertising

$30,000

Trade Promotion

$30,000

Sales Promotion

$18,000

Salaries & Benefits

$180,000

What is Shannon's cost of goods sold?

3. Assume that projected revenue for 2018 is 1363442. Also assume the following projected 2018 costs in each of the cost categories from question one:

Packaged (Cans & Bottles)

$154652

Kegs

$79105

Shrinkage/WIP Loss

$42,000

Contract Labor

$9,000

Direct Labor

$240,000

Freight

$18,000

Consumer Advertising

$30,000

Trade Promotion

$30,000

Sales Promotion

$18,000

Salaries & Benefits

$180,000

Given these costs, compute Shannon’s projected contribution margin in dollars.

4. Assume that total sales revenue for 2018 is projected to be $1270127. Assume also the following costs for Shannon’s Brewery:

Packaged (Cans & Bottles)

$150,000

Kegs

$80,000

Shrinkage/WIP Loss

$42,000

Contract Labor

$9,000

Direct Labor

$240,000

Freight

$18,000

Consumer Advertising

$27488

Trade Promotion

$32927

Sales Promotion

$18,000

Salaries & Benefits

$180,000

Compute Shannon’s %NMC. Round your answer to the nearest percent. For example, if your computed answer is 99.4% your answer rounds down to 99%. If your computed answer is 99.5% you should round up to 100%. DO NOT INCLUDE THE % SIGN IN YOUR ANSWER.

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