One case of Pale Ale ...
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Accounting
| One case of Pale Ale | ||||||||
| per unit | ||||||||
| Selling price | $25 | current volume | 26,000 | cases (24 beers in a case) | ||||
| malts | $2.60 | |||||||
| hops | $2.40 | |||||||
| yeast | $0.50 | |||||||
| packaging | $5.00 | |||||||
| *other production costs | $4.50 | *5 gallons of water for every gallon of beer, CO2, utilities, taxes | ||||||
| shipping | $1.75 | |||||||
| selling | $1.25 | |||||||
| total variable costs | $18.00 | |||||||
| total fixed up to 28,000 capacity | ||||||||
| Salary brewer | $1.15 | $30,000.00 | ||||||
| Salalry driver | $0.77 | $20,000.00 | ||||||
| rent | $1.92 | $50,000.00 | ||||||
| truck | $0.92 | $24,000.00 | ||||||
| promotion exp | $0.19 | $5,000.00 | ||||||
| total costs | $22.96 | |||||||
#1 If we spend $500 on t-shirts, bottle openers and glasses, then we can expect to sell another 100 cases of beer. Do you recommend we do this advertising campaign? How much will Net income go up, or down? (INCREMENTAL ANALYSIS)
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