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In: Accounting

Break-Even Sales Anheuser-Busch InBev SA/NV (BUD) reported the following operating information for a recent year: Sales...

Break-Even Sales

Anheuser-Busch InBev SA/NV (BUD) reported the following operating information for a recent year:

Sales $3,744,000
Cost of goods sold $936,000
Selling, general, and administrative expenses 364,000 1,300,000
Operating income $2,444,000*
*Before special items

In addition, assume that Anheuser-Busch InBev sold 26,000 barrels of beer during the year. Assume that variable costs were 75% of the cost of goods sold and 50% of selling, general, and administrative expenses. Assume that the remaining costs are fixed. For the following year, assume that Anheuser-Busch InBev expects pricing, variable costs per barrel, and fixed costs to remain constant, except that new distribution and general office facilities are expected to increase fixed costs by $12,500.

a. Compute the break-even number of barrels for the current year. Round to the nearest whole barrel.

b. Compute the anticipated break-even number of barrels for the following year. Round to the nearest whole barrel.
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Solutions

Expert Solution

Final breakeven quantity of barrels have been rounded off as per the requirement of the question.

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ekkarill92 answered 2 years ago
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