BeerBev, Inc., reported the following operating information for a recent year: Net sales $7,168,000 Cost of goods sold $1,792,000 Selling, general, and administrative expenses 784,000 $2,576,000 Income from operations $ 4,592,000* *Before special items In addition, assume that BeerBev sold 56,000 barrels of beer during the year. Assume that variable costs were 75% of the cost of goods sold and 50% of selling, general, and administration expenses. Assume that the remaining costs are fixed. For the following year, assume that BeerBev expects pricing, variable costs per barrel, and fixed costs to remain constant, except that new
Break-Even Sales
BeerBev, Inc., reported the following operating information for a recent year:
| Net sales | $7,168,000 |
| Cost of goods sold | $1,792,000 |
| Selling, general, and administrative expenses | 784,000 |
| $2,576,000 | |
| Income from operations | $ 4,592,000* |
*Before special items
In addition, assume that BeerBev sold 56,000 barrels of beer during the year. Assume that variable costs were 75% of the cost of goods sold and 50% of selling, general, and administration expenses. Assume that the remaining costs are fixed. For the following year, assume that BeerBev 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 $25,200.
When computing the cost per unit amounts for the break-even formula, round to two decimal places. If required, round your final answer to one decimal place.
a. Compute the break-even number of barrels for the current year.
fill in the blank 1 barrels
b. Compute the anticipated break-even number of barrels for the following year.
fill in the blank 2 barrels
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