Prior to Accounting for Product Transfers, a Manager Calculates Her

question 26

Multiple Choice

Prior to accounting for product transfers, a manager calculates her food cost as 32.3% and her beverage cost as 22.5%. Total transfers from her kitchen to the bar equal $1,000 and total transfers from the bar to the kitchen equal $500. After these transfers have been made

• A) both the food and beverage cost % will increase.
• B) the food cost % will decrease and the beverage cost % will increase.
• C) the food cost % will increase and the beverage cost % will decrease.
• D) both the food and beverage cost % will decrease.

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