In the cocktail lounge at Fribble\'s Hotel, a straight shot of Irish whiskey is

Question

In the cocktail lounge at Fribble's Hotel, a straight shot of Irish whiskey is 1.5 ounces. The purchase price for a 1-liter bottle of the pouring brand is $16.95. If the desired-cost-to-sales ratio is 20 percent, what should be the sales price for the drink? In the cocktail lounge at Fribble's Hotel, a straight shot of Irish whiskey is 1.5 ounces. The purchase price for a 1-liter bottle of the pouring brand is $16.95. If the desired-cost-to-sales ratio is 20 percent, what should be the sales price for the drink?

Explanation / Answer

Cost for 1 liter bottle = $16.95

cost to sales ratio = 20%

16.95/sales = 20%

sales = 16.95/20% = 16.95/0.2 = $84.75 per liter

Now, 1 liter = 33.814 ounces

so selling price for 33.814 ounces = 84.75

selling price for 1.5 ounce = (84.75/33.814)*1.5

= $3.76

So, the sales price for a 1.5 ounces drink should be $3.76

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