Master Brewer Certification Food Cost Management & Pricing 2 — Questions and Answers
Question 1: A brewery's taproom sells a pint of IPA for $8.00 with a pour cost of $1.60. What is the pour cost percentage?
- 15%
- 20% (Correct answer)
- 25%
- 12%
Correct answer: 20%
Pour cost percentage = (cost / selling price) × 100 = ($1.60 / $8.00) × 100 = 20%.
Question 2: Which inventory valuation method assigns the cost of the most recently purchased ingredients to goods sold first?
- FIFO
- LIFO (Correct answer)
- Weighted Average
- Specific Identification
Correct answer: LIFO
LIFO (Last-In, First-Out) assumes the most recently purchased inventory is sold first, which can reduce taxable income during inflationary periods.
Question 3: A craft brewery wants to price a new seasonal ale using a 28% target pour cost. If the ingredient cost per pint is $2.24, what should the selling price be?
- $6.72
- $7.50
- $8.00 (Correct answer)
- $9.00
Correct answer: $8.00
Selling price = cost / target pour cost percentage = $2.24 / 0.28 = $8.00.
Question 4: What does 'yield percentage' refer to in brewing ingredient cost calculations?
- The percentage of grain that converts to alcohol
- The usable portion of an ingredient after waste and loss (Correct answer)
- The ratio of wort collected to total water used
- The efficiency of hop utilization during boiling
Correct answer: The usable portion of an ingredient after waste and loss
Yield percentage represents the usable amount of an ingredient after trimming, spoilage, or processing losses, directly affecting the true cost per usable unit.
Question 5: A brewer purchases 500 lbs of malt at $0.80/lb but records 10% shrinkage during milling. What is the true cost per usable pound?
- $0.80
- $0.88
- $0.89 (Correct answer)
- $0.90
Correct answer: $0.89
Usable weight = 500 × 0.90 = 450 lbs; true cost = (500 × $0.80) / 450 = $400 / 450 ≈ $0.889 per lb.
Question 6: In a brewery taproom, 'velocity pricing' refers to:
- Charging more for faster delivery of kegs
- Adjusting prices based on time of day or demand levels (Correct answer)
- Setting prices to match competitor speed of service
- Pricing based on fermentation speed of the beer
Correct answer: Adjusting prices based on time of day or demand levels
Velocity pricing (dynamic pricing) adjusts drink prices based on demand patterns, such as lowering prices during slow periods and raising them during peak hours.
Question 7: Which cost is considered a semi-variable cost in brewery operations?
- Rent on the brewing facility
- Hop and malt purchases tied directly to batch size
- Utility bills that have a fixed base charge plus usage charges (Correct answer)
- Brewer's annual salary
Correct answer: Utility bills that have a fixed base charge plus usage charges
Semi-variable costs have both a fixed component (base utility charge) and a variable component (usage-based charges), making them neither purely fixed nor purely variable.
Master Brewer Certification Food Cost Management & Pricing 2
A brewery's taproom sells a pint of IPA for $8.00 with a pour cost of $1.60.
What is the pour cost percentage?