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 2015 are expected to be $1,127,483. Given the proportions of beer sold in kegs, bottles, and cans, what will be the predicted dollar sales of beer sold in kegs?

Answer 1

Solution

Shannon’s Brewery

Determination of predicted dollar sales of beer sold in kegs:

Estimated overall sales for FY 2015 = $1,127,483

60% of craft beer sales in kegs = $1,127,483 x 60% = $676,490 (rounded to nearest dollar)

Hence, craft beer sales in Kegs = $676,490

Beer sold through own on premise taproom = 35% x $1,127,483 = $394,619

Beer sold through off-premise via various retails outlets = 65% x $1,127,483 = $732,864

Packaged beer (bottles and cans) = 40% of $1,127,483 = $450,993

Beer sold in cans = 80% of 450,993 = $360,794 (rounded to nearest dollar)

Beer sold as bottled beer = 20% of $450,993 = $90,199