For questions requiring an answer expressed in dollars be sure and round your answer to the nearest dollar.

Question 1:

Consider the following revenue and cost data for Shannons Brewery in Keller, Texas. Shannons sels 35% of its beer production through its own on-premise taproom. The bulk of its sales (65%) are made off-premise 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 Shannons craft beer sales (60%) occurs in kegs (31 gallons per keg).

The costs incurred by Shannons 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 brewhouse 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 discussion, identify whether that cost is fixed or variable in nature.

A. Variable B. Fixed

__ Beer in kegs

__ Beer in bottles and cans

__ Shrinkage and WIP

__ Direct Labor

__ Contract Labor

__ Shipping

__ Consumer Advertising __ Digital Media Promotion

__ Sales Promotion

__ Salaries & Benefits

Question 2:

Consider the following revenue and cost data for Shannons Brewery in Keller, Texas. Shannons 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 Shannons 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?

Question 3:

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

Packaged (Cans & Bottles).....$134,939

Kegs .....$75,100

Shrinkage and 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 Shannons cost of goods sold?

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Question 4:

Assume that projected revenue for 2015 is 1,216,926. Also assume the following projected 2015 costs in cost categories from question one: Packaged (Cans & Bottles) .....$136,298

Kegs..... $60,854

Shrinkage and 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 Shannons projected contribution margins in dollars.

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Question 5:

Assume that total sales revenues for 2015 is projected to be $1,328,168. Assume also the following costs for Shannon's Brewery:

Packaged (Cans & Bottles)..... $137,026

Kegs..... $65,096

Shrinkage and 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 Shannons %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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