Question
Recipe Cost Company Averages Product Product Mix Cost of Beverages Beverage Sales Beverage Cost % Beer 30% $24,336 $121,680 Wine 20% 20,280 81,120 Spirits (nonfrozen
| Company Averages | ||||
|---|---|---|---|---|
| Product | Product Mix | Cost of Beverages | Beverage Sales | Beverage Cost % |
| Beer | 30% | $24,336 | $121,680 | |
| Wine | 20% | 20,280 | 81,120 | |
| Spirits (nonfrozen specialty drinks) | 30% | 30,420 | 121,680 | |
| Spirits (frozen specialty drinks) | 20% | 24,336 | 81,120 | |
| Total | ||||
| Jana's Beachfront Restaurant | ||||
| Product | Product Mix | Cost of Beverages | Beverage Sales | Beverage Cost % |
| Beer | 15% | $10,700 | $53,500 | |
| Wine | 5% | 6,125 | 24,500 | |
| Spirits (nonfrozen specialty drinks) | 25% | 30,500 | 122,000 | |
| Spirits (frozen specialty drinks) | 55% | 75,000 | 250,000 | |
| Total |
Look at the sales mix and the beverage cost percentages of both the company and the beachfront restaurant. Explain why Janas total beverage cost percentages are consistently different from the company averages. What would you advise Jana to tell her regional manager?
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Managerial Economics Theory Applications and Cases
Authors: Bruce Allen, Keith Weigelt, Neil A. Doherty, Edwin Mansfield
8th edition
978-0393124491, 393124495, 978-0039391277, 393912779, 978-0393912777
