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

Question

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Transferring $1,000 from the kitchen to the bar increases the cost of goods sold for beverages, raising the beverage cost percentage. Conversely, transferring $500 from the bar to the kitchen decreases the cost of goods sold for food, lowering the food cost percentage.

Prior to Accounting for Product Transfers, a Manager Calculates Her