The Loft is an upscale lounge that caters to young professionals who enjoy drinks after work in a casual and comfortable setting. The Loft has a specialty cocktail menu with items that its owner and head bartender, Stefan Young, created. All cocktails on the specialty menu are $15 each and include a variety of alcohol or liquors and are "hand-crafted" with ingredients such as egg whites, orange blossom water, lemon juice, lime juice, and simple syrup. Stefan has priced his cocktails so that he earns a 70% profit margin on each sale. Thus, the total costs to prepare each specialty cocktail are 30% of the retail price. Last month, Stefan sold 1,250 specialty cocktails. How much profit did Stefan's Loft business earn on the sale of specialty cocktails?
A) $13,125
B) $5,625
C) $6,500
D) $11,500
E) $10,725

Question

Quizplus · Accepted Answer

The total revenue earned by Stefan for selling 1,250 specialty cocktails is: 
$15 x 1,250 = $18,750
Stefan's profit margin on each cocktail is 70%, so his profit on each cocktail is: 
$15 x 0.7 = $10.50
Therefore, his total profit earned on the sale of 1,250 specialty cocktails is: 
$10.50 x 1,250 = $13,125.

So the answer is A, $13,125.

The Loft Is an Upscale Lounge That Caters to Young