Break-Even Sales Anheuser-Busch InBev Companies, Inc., reported the following op

Question

Break-Even Sales

Anheuser-Busch InBev Companies, Inc., reported the following operating information for a recent year (in millions of dollars):

In addition, assume that Anheuser-Busch InBev sold 320 million barrels of beer during the year. Assume that variable costs were 70% of the cost of goods sold and 40% of selling, general, and administration 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 $400 million.

When computing the cost per unit amounts for the break-even formula, round to two decimal places. If required, round your final answer to the nearest whole barrel.

a. Compute the break-even number of barrels for the current year.
___ barrels

b. Compute the anticipated break-even number of barrels for the following year.
____ barrels

Net sales $39,758 Cost of goods sold $16,447 Selling, general and administration 10,578 $27,025 Income from operations $12,733* *Before special items

Explanation / Answer

Contribution per unit = $24,014/320 = $75.04 per barrel

Fixed cost

a)BEP ( untis) = Fixed cost / contribution per unit

                        = $11,281/ $75.04

                        = 150,333,156 barrels

b)( $11,281 +400)/ 75.04 = 155,663,646

Net sales $39,758 less:Variable cost of goods sold (16,447 @70%) 11,513 Selling and administration expense (10,578@40%)     4,231 Contribution $24,014

Related Questions

Navigate

• Browse (All)
• Browse B
• Subjects

---