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.


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 1 year ago

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