Question

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 $1,293,237. 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.

Answer 1

Answer:

$775,942.

Explanation:

The following breakdowns can be obtained from the question:

Sales through own on-premise taproom = 35%

Sales made off-premise = 65%

Package sales of bottles and cans via on-premise and off-premise = 40% of total sales (i.e. of 100%)

Beer sold in kegs = 60% of total sales (i.e. of 100%)

Beer sold in cans = 80% of 40% of total

Bottled beer sold = 20% of 40% of total

Expected overall sales for FY 2018 = $1,293,237

From the breakdown above, the predicted dollar sales of beer sold in kegs can be calculated as follows:

Predicted amount of beer sold in kegs = 60% × $1,293,237 = $775,942

Therefore, the predicted dollar sales of beer sold in kegs is $775,942.