FSM MIDTERM EXAM 2 QUESTIONS WITH SOLUTIONS
2025 GRADED A+
✔✔Average Sales Value Method - ✔✔A method for monitoring bar operations that
calculates the potential sales value of all bottles of liquor consumed, based on the
number of empty bottles at the bar multiplied by the average potential sales value of
each bottle.
✔✔Mixed drink differential - ✔✔Is defined as the difference between the sales price of a
given drink and the sales value of its primary ingredient if sold as a straight shot
✔✔Turnover rate - ✔✔Turnover rate=Cost of beverages sold for a period/Average
inventory for the period
✔✔Average inventory - ✔✔Average inventory=Opening inventory + Closing inventory/2
✔✔Generally accepted turnover rates - ✔✔•Spirits-1.5
•Beers-2.0
•Wines-Too difficult to determine
✔✔The three objectives of beverage sales control - ✔✔1. Optimizing the number of
sales
2. Maximizing profit
3.Controlling revenue
✔✔Optimizing the number of sales - ✔✔Means engaging in activities that will increase
the number of customers to the desired level.
✔✔Reasons customers patronize beverage operations - ✔✔1. Socializing
2. Conducting business
3. Eating
4. Seeking entertainment
5. Killing time
✔✔Market segment - ✔✔A subgroup of potential patrons with similar characteristics.
Market segments can be based on such characteristics as age, sex, income level, and
occupation.
✔✔Dram shop laws - ✔✔Laws that hold the serving establishment and the server
financially liable for damages if any employee in the establishment has served an
alcoholic drink to an intoxicated person, who in turn, causes harm to a third party.
✔✔In beverage operations, profit maximization is accomplished in two ways: - ✔✔1.
Establishing drink prices that will maximize gross profit
2. Influencing customers' selections
, ✔✔Factors in establishing drink prices - ✔✔1. Overhead costs
2. Insurance premiums
3. Costs associated with purchasing and maintaining licenses.
4. Entertainment
5. Clientele targeted
6. Average income in the area
7. Prices charged by the competition
✔✔Influencing customers beverage selection - ✔✔1. Training servers to upsell
2. Featuring and promoting specialty drinks
3. Preparing carefully designed beverage menus
✔✔Upselling - ✔✔Suggesting drinks that will bring a higher contribution margin
✔✔Revenue control - ✔✔Consists of those activities established to ensure that each
sale to a customer results in appropriate revenue to the operation.
✔✔Control problems with bartender - ✔✔1. Working with cash drawer open
2. Under-ringing sales
3. Overcharging customers and pocketing money
4. Undercharging customers
5. Overpouring
6. Underpouring
7. Diluting bottle contents
8. Bringing ones own bottle into the bar
9. Charging for drinks not served
10. Drinking on the job
✔✔Common three uses of guest checks - ✔✔1. Pre check systems
2. Automated systems
3. Other types of computer systems
✔✔Precheck system - ✔✔Incorporates at least one register that enables bartenders to
record sales as drinks are served and to accumulate the sales to any one customer on
one check.
✔✔Storing control is established in beverage operations to achieve 3 important
objectives: - ✔✔1. To prevent pilferage
2. To ensure accessibility when needed
3. To preserve quality
✔✔Procedures to maximize shelf life or stored beverages - ✔✔1. Those dealing with
temperature, humidity, and light in the storage facilities
2025 GRADED A+
✔✔Average Sales Value Method - ✔✔A method for monitoring bar operations that
calculates the potential sales value of all bottles of liquor consumed, based on the
number of empty bottles at the bar multiplied by the average potential sales value of
each bottle.
✔✔Mixed drink differential - ✔✔Is defined as the difference between the sales price of a
given drink and the sales value of its primary ingredient if sold as a straight shot
✔✔Turnover rate - ✔✔Turnover rate=Cost of beverages sold for a period/Average
inventory for the period
✔✔Average inventory - ✔✔Average inventory=Opening inventory + Closing inventory/2
✔✔Generally accepted turnover rates - ✔✔•Spirits-1.5
•Beers-2.0
•Wines-Too difficult to determine
✔✔The three objectives of beverage sales control - ✔✔1. Optimizing the number of
sales
2. Maximizing profit
3.Controlling revenue
✔✔Optimizing the number of sales - ✔✔Means engaging in activities that will increase
the number of customers to the desired level.
✔✔Reasons customers patronize beverage operations - ✔✔1. Socializing
2. Conducting business
3. Eating
4. Seeking entertainment
5. Killing time
✔✔Market segment - ✔✔A subgroup of potential patrons with similar characteristics.
Market segments can be based on such characteristics as age, sex, income level, and
occupation.
✔✔Dram shop laws - ✔✔Laws that hold the serving establishment and the server
financially liable for damages if any employee in the establishment has served an
alcoholic drink to an intoxicated person, who in turn, causes harm to a third party.
✔✔In beverage operations, profit maximization is accomplished in two ways: - ✔✔1.
Establishing drink prices that will maximize gross profit
2. Influencing customers' selections
, ✔✔Factors in establishing drink prices - ✔✔1. Overhead costs
2. Insurance premiums
3. Costs associated with purchasing and maintaining licenses.
4. Entertainment
5. Clientele targeted
6. Average income in the area
7. Prices charged by the competition
✔✔Influencing customers beverage selection - ✔✔1. Training servers to upsell
2. Featuring and promoting specialty drinks
3. Preparing carefully designed beverage menus
✔✔Upselling - ✔✔Suggesting drinks that will bring a higher contribution margin
✔✔Revenue control - ✔✔Consists of those activities established to ensure that each
sale to a customer results in appropriate revenue to the operation.
✔✔Control problems with bartender - ✔✔1. Working with cash drawer open
2. Under-ringing sales
3. Overcharging customers and pocketing money
4. Undercharging customers
5. Overpouring
6. Underpouring
7. Diluting bottle contents
8. Bringing ones own bottle into the bar
9. Charging for drinks not served
10. Drinking on the job
✔✔Common three uses of guest checks - ✔✔1. Pre check systems
2. Automated systems
3. Other types of computer systems
✔✔Precheck system - ✔✔Incorporates at least one register that enables bartenders to
record sales as drinks are served and to accumulate the sales to any one customer on
one check.
✔✔Storing control is established in beverage operations to achieve 3 important
objectives: - ✔✔1. To prevent pilferage
2. To ensure accessibility when needed
3. To preserve quality
✔✔Procedures to maximize shelf life or stored beverages - ✔✔1. Those dealing with
temperature, humidity, and light in the storage facilities
