Starbucks sells a slice of Iced Lemon pound Cake for $2.45 and a bottle of Apple Juice for $1.75. If they run a food cost of 18% and a beverage cost of 8%, what is the gross profit on an order of 10 slices of pound cake and 6 bottles of Apple juice. Please show your work.
To calculate the gross profit on an order of 10 slices of pound cake and 6 bottles of apple juice, we need to determine the total cost and total revenue.
First, let's calculate the cost of the pound cake:
Cost of 1 slice of pound cake = $2.45
Number of slices ordered = 10
Total cost of pound cake = Cost of 1 slice of pound cake * Number of slices ordered
= $2.45 * 10
= $24.50
Next, let's calculate the cost of apple juice:
Cost of 1 bottle of apple juice = $1.75
Number of bottles ordered = 6
Total cost of apple juice = Cost of 1 bottle of apple juice * Number of bottles ordered
= $1.75 * 6
= $10.50
Now, let's calculate the total cost of the order:
Total cost of the order = Total cost of pound cake + Total cost of apple juice
= $24.50 + $10.50
= $35.00
To calculate the gross profit, we need to apply the food cost and beverage cost percentages.
Food cost = 18% = 0.18
Beverage cost = 8% = 0.08
Gross profit = Total revenue - Total cost
Total revenue = (Cost of pound cake / (1 - Food cost)) + (Cost of apple juice / (1 - Beverage cost))
= ($35.00 / (1 - 0.18)) + ($10.50 / (1 - 0.08))
= ($35.00 / 0.82) + ($10.50 / 0.92)
= $42.68 + $11.41
= $54.09
Gross profit = Total revenue - Total cost
= $54.09 - $35.00
= $19.09
Therefore, the gross profit on an order of 10 slices of pound cake and 6 bottles of apple juice is $19.09.