1.4 Beverage Costing, Pour Cost & COGS Calculations

Beverage Costing, Pour Cost & COGS Calculations

The Court of Master Sommeliers, Americas treats the Business of the Sommelier as one of the key pillars of its education and examination. At the Certified level it is not a separate paper: it is folded directly into the 45-question Theory examination as simple math questions. A calculator is provided inside the Examplify platform, and a candidate may bring their own calculator provided it has no communication capability.

These questions are rarely difficult mathematically. They are difficult because they are read too quickly under a 38-minute clock. Almost every one of them turns on a single hinge: how many servings does this container yield, and what does each serving cost?

1. Cost Percentage: What the Number Actually Means

Wine cost percentage expresses product cost as a proportion of the revenue that product generates.

If your wine cost percentage is 30%, it means that for every $100 the business earns in wine revenue, $30 of that was the cost of the product itself.

The remaining $70 is gross profit — it is not profit in the owner's pocket, because labour, rent, glassware breakage and overhead still come out of it. This distinction between gross profit and net profit is a favourite trap in scenario questions.

Three forms of the same relationship are worth memorising, because the exam will ask for any one of the three:

$\text{Cost \%} = \frac{\text{Product Cost}}{\text{Selling Price}} \qquad \text{Selling Price} = \frac{\text{Product Cost}}{\text{Cost \%}} \qquad \text{Product Cost} = \text{Selling Price} \times \text{Cost \%}$

Note the direction of the middle equation. To find a price, you divide by the cost percentage. Candidates who multiply instead of divide produce a selling price lower than the cost — always sanity-check that your answer is bigger than what you paid.

2. Container Volumes and Servings per Bottle

CMS-A explicitly lists common container sizes as required knowledge. Learn both the metric and the US-ounce figure, because questions mix the two deliberately.

[!NOTE] CMS-A's own sample material rounds the standard bottle to 25 ounces in multi-step keg and purchasing problems. Read each question carefully: if the stem supplies its own conversion ("750 ml bottles hold 25 ounces"), use the number the question gives you, not the one you memorised.

Servings per bottle

$\text{Servings per bottle} = \frac{\text{Bottle volume}}{\text{Pour size}}$

Common by-the-glass pour sizes and their yields from a 750 ml bottle:

Most costing questions assume the operator plans on a whole number of pours (commonly 4 or 5 per bottle) so that the last glass is not a short pour. When a question states "you get 5 pours per bottle," accept that figure and do not recalculate it from the ounces.

3. Worked Example: Pricing a Glass

The cost of a bottle of wine to your restaurant is $30. You get 5 pours per bottle and have a 33% pour cost. How much do you have to charge for a glass of that wine? Round to the nearest dollar.

Work it in two clean steps.

Step 1 — Cost per pour.

$\frac{\$30}{5\text{ pours}} = \$6.00 \text{ per glass of product cost}$

Step 2 — Convert cost to price using the target cost percentage.

$\text{Price} = \frac{\$6.00}{0.33} = \$18.18 \;\longrightarrow\; \mathbf{\$18}$

A useful cross-check: at $18 per glass, five glasses return $90 on a $30 bottle, and $30 ÷ $90 = 33.3%. The answer is internally consistent.

Notice also the shortcut hiding in the numbers. At a 33% cost, the multiplier is roughly 3× the per-serving cost. A 25% target is a 4× multiplier; a 20% target is a 5× multiplier. Knowing the multiplier lets you answer many questions without touching the calculator.

4. Cost of Goods Sold (COGS)

CMS-A publishes the COGS equation candidates are expected to reproduce:

$\text{COGS} = (\text{BI} + \text{P}) - \text{EI}$

• BI = Beginning Inventory — last period's closing inventory value, in dollars or local currency
• P = Purchases — everything bought during the period, in dollars or local currency
• EI = Ending Inventory — this period's closing inventory value, in dollars or local currency

Read it as a plain-language sentence: everything I started with, plus everything I bought, minus everything still sitting on the shelf, is what I actually consumed.

And the companion equation:

$\text{Cost Percentage} = \frac{(\text{BI} + \text{P}) - \text{EI}}{\text{Wine Sales}}$

Worked example

A wine program opens the month with $42,000 of inventory, purchases $18,500 during the month, and counts $39,200 on the shelf at month end. Wine sales for the month were $71,000.

$\text{COGS} = (\$42{,}000 + \$18{,}500) - \$39{,}200 = \$21{,}300$

$\text{Cost \%} = \frac{\$21{,}300}{\$71{,}000} = 0.30 = \mathbf{30\%}$

The program is running a 30% wine cost — healthy for a wine-driven restaurant, where 28–35% is a common band.

5. Multi-Step Purchasing Scenarios

The most demanding business questions chain several steps together. CMS-A's published example is worth working end to end.

Your restaurant is featuring a Pinot Grigio by the keg. The keg holds the equivalent of 26 750-ml bottles, and 750-ml bottles hold 25 ounces. There are 500 covers; 3 out of every 5 customers order one glass; glass pour size is 4 ounces; and there is 1 ounce of over-pour/spillage factored in per 12 glasses. (a) How many guests order a glass? (b) How many total ounces will you pour? (c) How many kegs must you purchase?

(a) Guests ordering a glass

$500 \times \frac{3}{5} = \mathbf{300 \text{ guests}}$

(b) Total ounces required

Poured wine: $300 \times 4\text{ oz} = 1{,}200\text{ oz}$

Spillage allowance: $\dfrac{300\text{ glasses}}{12} \times 1\text{ oz} = 25\text{ oz}$

$1{,}200 + 25 = \mathbf{1{,}225 \text{ ounces}}$

(c) Kegs to purchase

Keg capacity: $26 \times 25\text{ oz} = 650\text{ oz}$

$\frac{1{,}225}{650} = 1.88 \text{ kegs} \;\longrightarrow\; \mathbf{2 \text{ kegs}}$

You cannot buy 1.88 kegs. Always round a purchasing answer up to the next whole container; rounding down leaves the floor dry at 9 p.m. Conversely, when a question asks how many servings a fixed quantity yields, round down — a partial pour is not a serving.

+-----------------------------------------------------------------------------+
|                  ROUNDING RULES FOR EXAM MATH QUESTIONS                     |
|                                                                             |
|   "How many kegs / cases / bottles must you BUY?"      ---> ROUND UP        |
|   "How many glasses / servings can you POUR?"          ---> ROUND DOWN      |
|   "What must you CHARGE?"                              ---> round as told   |
|                                                        (usually to $1)      |
|   Always re-read whether the question wants ounces, millilitres, glasses,   |
|   bottles or dollars. The unit is the trap more often than the arithmetic.  |
+-----------------------------------------------------------------------------+