Question

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

QUESTION 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).

The costs incurred by Shannon’s for producing and selling its craft beers are as follows:

Beer sold in kegs. Includes the direct costs of ingredients and packaging.

Beer sold in bottles and cans. Includes the direct costs of ingredients and packaging.

Shrinkage and WIP loss. Losses from theft, damage, deterioration.

Direct Labor. Hourly labor costs for production and brew house operations.

Contract Labor. Hourly costs of contract labor hired during periods of peak demand.

Shipping. Shipping and handling costs to the wholesaler.

Consumer Advertising. Advertising in local cable TV and print media.

Digital Media Promotion. Costs of promotion in social media and website maintenance.

Sales Promotion. Brochures, give-away items (specialty items), gifts not considered to be volume sensitive.

Salaries and Benefits.  Cost of management salaries, retirement, and healthcare benefits.

For each cost listed below from the above discussion, identify whether that cost is fixed or variable in nature.

      -       A.       B.   

Beer in kegs.

      -       A.       B.   

Beer in bottles and cans.

      -       A.       B.   

Shrinkage and WIP.

      -       A.       B.   

Direct Labor.

      -       A.       B.   

Contract Labor.

      -       A.       B.   

Shipping.

      -       A.       B.   

Consumer Advertising.

      -       A.       B.   

Digital Media Promotion.

      -       A.       B.   

Sales Promotion.,

      -       A.       B.   

Salaries & Benefits.

A.

Variable

B.

Fixed.

5 points   

QUESTION 2

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 $1,045,518. Given the proportions of beer sold in kegs, bottles, and cans, what will be the predicted dollar sales of beer sold in kegs?

5 points   

QUESTION 3

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

Packaged (Cans & Bottles)

$143,906

Kegs

$74,010

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?

10 points   

QUESTION 4

Assume that projected revenue for 2015 is 1,263,806. Also assume the following projected 2015 costs in each of the cost categories from question one:

Packaged (Cans & Bottles)

$160,972

Kegs

$60,368

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.

10 points   

QUESTION 5

Assume that total sales revenue for 2015 is projected to be $1,342,972. Assume also the following costs for Shannon’s Brewery:

Packaged (Cans & Bottles)

$120,084

Kegs

$61,795

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

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.

Homework Answers

Answer #1

1. A, A, A, A, A, A, B,B, B, B

2. Predicted dollar sales of Beer sold in kegs is 1045518*60% = $ 627,311

3. Cost of goods sold refers to the costs attributable to bringing the goods to their present condition.

COGS = 143906+74010+42000+9000+240000 = 508916

4. Contribution = Sales - Variable costs

= 1263806 - (160972+60368+42000+9000+240000+18000)

= 1263806 - 530340

= 733466

5. Please clarify about NMC. Please leave a comment so I can get back to you on that.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Consider the following revenue and cost data for Shannon’s Brewery in Keller, Texas. Shannon’s sells 35%...
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,...
Given the above information in Q1, Shannon’s wants to increase its sales to retailers by 20%...
Given the above information in Q1, Shannon’s wants to increase its sales to retailers by 20% in the next year. Management estimates that the incremental promotion program required to generate sufficient demand to boost sales by 20% will be: Personal Selling Costs $ 60,000 (exclusive of commission) Consumer Advertising $ 60,293 Trade Promotion $ 38,164 Sales Promotion $ 25,000 Shannon’s will need to hire an additional sales person (paid a salary and commission) and provide some added administrative support. The...
QUESTION 1 Shannon’s Brewery in Keller, Texas is expanding distribution to a number of cities along...
QUESTION 1 Shannon’s Brewery in Keller, Texas is expanding distribution to a number of cities along the I-35 corridor south from Dallas to the Gulf Coast. Shannon’s typically distributes through large distributors such as Ben E. Keith located in Denton, Texas. However, Shannon Carter, CEO of Shannon’s Brewery, wants to employ a series of missionary sales persons to service restaurants, bars, supermarkets, and liquor stores. Their job will be to promote Shannon’s craft beers to these retailers and encourage them...
Find the cost of good manufactured based on the following data Revenue and expenses:                            &nb
Find the cost of good manufactured based on the following data Revenue and expenses:                                                January 1 inventories:       Purchases of raw materials            $170,000            Raw materials                                $ 30,000       Direct labor                                   240,000            Work in process                                $ 45,000       Indirect labor                                    40,000            Finished goods                            $105,000       Rent – factory                                   84,000       Depreciation – machinery                 35,000            December 31 inventories:       Insurance – factory                           18,000            Raw materials                                $ 40,000       Utilities – factory                                  2,500             Work...
Cost Formulas Shorewood Manufacturing produces a single product requiring the following directmaterial and direct labor: Cost...
Cost Formulas Shorewood Manufacturing produces a single product requiring the following directmaterial and direct labor: Cost per Unit of Input Required Amount per Unit of Product Material A $24 / pound 10 ounces Material B $15 / pound 8 ounces Material C $60 / gallon 0.3 gallon Cutting labor $27 / hour 30 minutes Shaping labor $33 / hour 15 minutes Finishing labor $36 / hour $45 minutes Manufacturing overhead consists of indirect material, $0.60 per unit of product; indirect...
The following inventory and cost data for the just completed year are taken from the accounting...
The following inventory and cost data for the just completed year are taken from the accounting records of Sanka Company: Inventories Increase in raw materials 4,000 Increase in work in process 30,000 30,000 Decrease in finished goods 90,000 90,000 Costs incurred Advertising expense 200,000 Direct labour cost 180,000 Purchases of raw materials 264,000 Rent, factory building 60,000 Indirect factory labour 112,600 Sales commissions 70,000 Utilities, factory 18,000 Maintenance, factory equipment 48,000 Supplies, factory 1,400 Depreciation, office equipment 16,000 Depreciation, factory...
1. Y Company recently collected the following cost data. July had $32,000 of overhead and 4,200...
1. Y Company recently collected the following cost data. July had $32,000 of overhead and 4,200 labor hours. August had $28,500 of overhead and $3,400 labor hours. September had $24,000 overhead and 2,000 labor hours. October had $38,500 of overhead and 6,000 labor hours. November had $45,000 overhead and 9,000 labor hours. December had $41,000 overhead and 7,500 labor hours. If the company uses the high-low method then how much would total fixed costs be? Group of answer choices $18,000...
The following data relate to the activities of Nana Company during the year: 1. Raw materials...
The following data relate to the activities of Nana Company during the year: 1. Raw materials used to produce $100,000 (all direct materials). 2. Salaries costs incurred on account: direct labour $200,000 (40,000 hours); indirect labour $60,000; selling and administrative $130,000. 3. Utilities cost incurred for the factory $40,000 on credit. 4. Advertising cost incurred for the year $50,000 on credit. 5. Depreciation recorded for the year $30,000, of which 60% related to the factory and 40% related to selling...
Required information The Foundational 15 [LO3-1, LO3-2, LO3-3, LO3-4] [The following information applies to the questions...
Required information The Foundational 15 [LO3-1, LO3-2, LO3-3, LO3-4] [The following information applies to the questions displayed below.] Bunnell Corporation is a manufacturer that uses job-order costing. On January 1, the company’s inventory balances were as follows: Raw materials $ 40,000 Work in process $ 18,000 Finished goods $ 35,000 The company applies overhead cost to jobs on the basis of direct labor-hours. For the current year, the company’s predetermined overhead rate of $16.25 per direct labor-hour was based on...
1.A soft drink bottler incurred the following factory utility cost: $4,046 for 910 cases bottled and...
1.A soft drink bottler incurred the following factory utility cost: $4,046 for 910 cases bottled and $4,109 for 1,010 cases bottled. Factory utility cost is a mixed cost containing both fixed and variable components. The variable factory utility cost per case bottled is closest to: $4.45 $4.07 $4.25 $0.63 2.The following cost data pertain to the operations of Rademaker Department Stores, Inc., for the month of March: Corporate headquarters building lease $ 92,000 Cosmetics Department sales commissions-Northridge Store $ 6,400...