Anheuser-Busch InBev SA/NV (BUD) reported the following operating information for a recent year: Sales $7,344,000 Cost of goods sold $1,836,000 Selling, general, and administrative expenses 510,000 2,346,000 Operating income $4,998,000* *Before special items In addition, assume that Anheuser-Busch InBev sold 51,000 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 $21,400.
Break-Even Sales
Anheuser-Busch InBev SA/NV (BUD) reported the following operating information for a recent year:
| Sales | $7,344,000 | |
| Cost of goods sold | $1,836,000 | |
| Selling, general, and administrative expenses | 510,000 | 2,346,000 |
| Operating income | $4,998,000* | |
| *Before special items |
In addition, assume that Anheuser-Busch InBev sold 51,000 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 $21,400.
a. Compute the break-even number of barrels for the current year. Round to the nearest whole barrel.
fill in the blank 1 barrels
b. Compute the anticipated break-even number of barrels for the following year. Round to the nearest whole barrel.
fill in the blank 2 barrels
Formula:
Contribution margin = Sales price - Variable cost
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