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In: Accounting

Molson-Coors Brewing Company (TAP) reported the following operating information for a recent year (in millions): Sales...

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

Solutions

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