Break-Even Sales Anheuser-Busch InBev SA/NV (BUD) reported the following operating information for a recent year: Sales $11,520,000 Cost of goods sold $2,880,000 Selling, general, and administrative expenses 960,000 3,840,000 Operating income $7,680,000* *Before special items In addition, assume that Anheuser-Busch InBev sold 60,000 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 $36,000. a. Compute the break-even number of barrels for the current year. Round to the nearest whole barrel. barrels b. Compute the anticipated break-even number of barrels for the following year. Round to the nearest whole barrel. barrels

Break-Even Sales Anheuser-Busch InBev SA/NV (BUD) reported the following operating information for a recent year: Sales $11,520,000 Cost of goods sold $2,880,000 Selling, general, and administrative expenses 960,000 3,840,000 Operating income $7,680,000* *Before special items In addition, assume that Anheuser-Busch InBev sold 60,000 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 $36,000. a. Compute the break-even number of barrels for the current year. Round to the nearest whole barrel. barrels b. Compute the anticipated break-even number of barrels for the following year. Round to the nearest whole barrel. barrels

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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4-3 Break-Even Sales Under Present and Proposed Conditions Portmann Company, operating at full capacity, sold 1,000,000 units at a price of $189 per unit during the current year. Its income statement is as follows: Sales $189,000,000 Cost of goods sold (98,000,000) Gross profit $91,000,000 Expenses: Selling expenses $14,000,000 Administrative expenses 19,800,000 Total expenses (33,800,000) Operating income $57,200,000 The division of costs between variable and fixed is as follows: Variable Fixed Cost of goods sold 70% 30% Selling expenses 75% 25% Administrative expenses 50% 50% Management is considering a plant expansion program for the following year that will permit an increase of $11,340,000 in yearly sales. The expansion will increase fixed costs by $4,000,000 but will not affect the relationship between sales and variable costs. Required: 1. Determine the total variable costs and the total fixed…
PROBLEM The following data pertain to instalment sales of Mickey's store: • Down payment, 20%. • Instaiment sales: P545,000 in Year 1; P785,000 in Year 2; and P968,000 in Year 3. • Mark-up on cost, 35%. • Collections after down payment: 40% in the year of sale, 35% in the year after sale, and 25% in the third year. Note: Round off the decimal factors to the nearest whole number. Sample - 35.74% to 36% REQUIREMENTS: 1. The realized gross profit in year 1 2. The realized gross profit in year 3 3. The unrealized gross profit for instaiment sales made during Year 2, as of the end of Year 2 4. The instalment account receivables at the end of year 3 5. The unrealized gross profit at the end of year 3
Break-Even Sales BeerBev, Inc., reported the following operating information for a recent year: $4,224,000 $1,056,000 440,000 $1,496,000 $ 2,728,000* Net sales Cost of goods sold Selling, general, and administrative expenses Income from operations *Before special items In addition, assume that BeerBev sold 44,000 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 $14,500. 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. barrels b. Compute the anticipated…
Break-Even Sales Under Present and Proposed Conditions Portmann Company, operating at full capacity, sold 1,000,000 units at a price of $190 per unit during the current year. Its income statement is as follows: Sales $190,000,000 Cost of goods sold (100,000,000) Gross profit $90,000,000 Expenses: Selling expenses $14,000,000 Administrative expenses 19,000,000 Total expenses (33,000,000) Operating income $57,000,000 The division of costs between variable and fixed is as follows: Variable Fixed Cost of goods sold 70% 30% Selling expenses 75% 25% Administrative expenses 50% 50% Management is considering a plant expansion program for the following year that will permit an increase of $13,300,000 in yearly sales. The expansion will increase fixed costs by $5,000,000 but will not affect the relationship between sales and variable costs. Required: 1. Determine the total variable costs and the total fixed costs…
Break-Even Sales Under Present and Proposed Conditions Portmann Company, operating at full capacity, sold 1,000,000 units at a price of $187 per unit during the current year. Its income statement is as follows: Sales $187,000,000 Cost of goods sold (98,000,000) Gross profit $89,000,000 Expenses: Selling expenses $15,000,000 Administrative expenses 14,300,000 Total expenses (29,300,000) Operating income $59,700,000 The division of costs between variable and fixed is as follows: Variable Fixed Cost of goods sold 70% 30% Selling expenses 75% 25% Administrative expenses 50% 50% Management is considering a plant expansion program for the following year that will permit an increase of $11,220,000 in yearly sales. The expansion will increase fixed costs by $3,000,000 but will not affect the relationship between sales and variable costs. Required: 1. Determine the total variable costs and the total fixed costs…
Break-Even Sales Anheuser-Busch InBev Companies, Inc., reported the following operating information for a recent year: $5,952,000 $1,488,000 372,000 $1,860,000 $ 4,092,000* Sales Cost of goods sold Selling, general and administration Income from operations *Before special items In addition, assume that Anheuser-Busch InBev sold 31,000 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 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 $16,700. a. Compute the break-even number of barrels for the current year. Round to the nearest whole barrel. barrels b. Compute the anticipated break-even number of barrels for the following year. Round to the nearest whole…
Break-even sales under present and proposed conditions Portmann Company, operating at full capacity, sold 1,000,000 units at a price of $186 per unit during the current year. Its income statement is as follows: Line Item Description Amount Amount Sales $186,000,000 Cost of goods sold (99,000,000) Gross profit $87,000,000 Expenses: Selling expenses $14,000,000 Administrative expenses 12,400,000 Total expenses (26,400,000) Operating income $60,600,000 The division of costs between variable and fixed is as follows: Line Item Description Variable Fixed Cost of goods sold 70% 30% Selling expenses 75% 25% Administrative expenses 50% 50% Management is considering a plant expansion program for the following year that will permit an increase of $9,300,000 in yearly sales. The expansion will increase fixed costs by $5,000,000 but will not affect the relationship between sales and variable costs. 4. Compute the break-even…
Break-Even Sales Under Present and Proposed Conditions Portmann Company, operating at full capacity, sold 1,000,000 units at a price of $186 per unit during the current year. Its income statement is as follows: Sales $186,000,000 Cost of goods sold (99,000,000) Gross profit $87,000,000 Expenses: Selling expenses $14,000,000 Administrative expenses 12,400,000 Total expenses (26,400,000) $60,600,000 Operating income The division of costs between variable and fixed is as follows: Variable Fixed 70% 30% Cost of goods sold 75% 25% Selling expenses Administrative 50% 50% Management is considering a plant expansion program for the following year that will permit an increase of $11,160,009 in yearly sales. The expansion will increase fixed costs by $3,000,000 but will nor affect the relatiorship bet veen sales and variable costs, expenses Nex