I have th answer for part A (115 million), but can\'t get part B. Anheuser-Busch
ID: 2375771 • Letter: I
Question
I have th answer for part A (115 million), but can't get part B.
Anheuser-Busch InBev Companies, Inc., reported the following operating information for a recent year (in millions):
Net sales: $23, 507
Cost of good sold: $10,336
Selling,general and administration: $ 7,831
$18,167
Income from operations $ 5,340 (before special items)
In additions, assume that Anheuser-Busch InBev sold 200 million barrels of beer during the year. Assume that variable costs were 75% of the cost of good sold and 40% of selling, general and administration expenses. Assume that the remaining cost are fixed. For the following year, asumme that Anheuser-Busch in Bev expect pricing, variable costs per barrel, and fixed costs to remain constant, expect that new distribution and general office facilities are expected to increase fixed costs by $ 225 million.
a) Compute the break-even number of barrels for the current year. note: for the selling price per barrel and variable costs per barrrel, round to the nearest cent. Also, round the break-even to the nearest barrel.
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b) Compute the anticipated break-even number of barrels for the following year.
Explanation / Answer
a) Compute the break-even number of barrels for the current year. note: for the selling price per barrel and variable costs per barrrel, round to the nearest cent. Also, round the break-even to the nearest barrel.
Selling Price per unit = 23507/200 = 117.535
Variable Cost per unit = (10336*75% + 7831*40%)/200 = 54.422
Fixed Cost = 18167- 200*54.422 = $7282.60 million
Break Even= 7282.60/(117.535-54.422) = 115 million Barrel
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b) Compute the anticipated break-even number of barrels for the following year.
Selling Price per unit = 23507/200 = 117.535
Variable Cost per unit = (10336*75% + 7831*40%)/200 = 54.422
Break Even = (7282.60+225)/(117.535-54.422) =7507.60/63.113 = 119 million Barrel