Question

A bar operation achieved $92,000 in beverage sales for an accounting period. For that period, it had a Beginning Inventory of $25,000. Ending Inventory was $22,000 and beverage purchases equaled $20,000. What was the bar’s Beverage Cost percentage for the period?

Answer 1

Answer:

The bar’s Beverage Cost percentage for the period is 25%

Explanation:

In this question, first we have to find the cost of goods sold which is shown below:

Cost of goods sold = Beginning Inventory + Purchase made - ending inventory

= $25,000 + $20,000 - $22,000

= $23,000

Now the cost percentage would be equal to

= (Cost of goods sold) ÷ (sales) × 100

= ($23,000) ÷ ($92,000) × 100

= 25%