In: Accounting
Molson-Coors Brewing Company (TAP) reported the following operating information for a recent year (in millions):
Sales | $11,003 |
Cost of goods sold | (6,217) |
Gross profit | $4,786 |
Marketing, general, and admin. expenses | (3,032) |
Operating income | $1,754* |
*Before special items
Assume that Molson-Coors sold 240 million barrels of beer during the year, variable costs were 75% of the cost of goods sold and 35% of marketing, general, and administrative expenses, and that the remaining costs are fixed. For the following year, assume that Molson-Coors 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 $50 million.
Round intermediate calculations to the nearest cent and the final answers to the nearest whole barrel. (Do not round to the nearest million.)
a. Compute the break-even sales (barrels) for
the current year.
barrels
b. Compute the anticipated break-even sales
(barrels) for the following year.
barrels
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