Question

what is the beverage cost percentage of an operation that has an opening inventory of $7,654, a closing inventory of $8,732, purchases of $15,876 and revenue of $95,786

Answer 1

To calculate the beverage cost percentage, the cost of goods sold (COGS) is determined by adding the opening inventory to purchases, subtracting the closing inventory, and then dividing by total beverage revenue and multiplying by 100. In this case, the beverage cost percentage for the operation is 15.44%.

Step-by-step explanation:

The question asks how to calculate the beverage cost percentage for a business operation given certain financial data. To find this percentage, we need to follow these steps:

Calculate the cost of goods sold (COGS) for beverages by adding the opening inventory to purchases and subtracting the closing inventory: COGS = Opening Inventory + Purchases - Closing Inventory.

Divide the COGS by the total beverage revenue and multiply by 100 to find the beverage cost percentage.

Using the provided data:

• Opening Inventory: $7,654
• Purchases: $15,876
• Closing Inventory: $8,732
• Revenue: $95,786

We first calculate the COGS:

COGS = $7,654 + $15,876 - $8,732 = $14,798

Next, we compute the beverage cost percentage:

Beverage Cost Percentage = ($14,798 / $95,786) × 100 = 15.44%

Therefore, the beverage cost percentage of the operation is 15.44%.