Break-even sales The Boston Beer Company Inc. (SAM) produces Samuel Adams beer and other alcoholic beverages. Boston Beer reported the following operating information for a recent year (in thousands): Sales Cost of goods sold $8,496,000 $2,124,000 Selling, general, and administrative expenses 944,000 (3,068,000) Operating income $5,428,000* *Before special items In addition, assume that Boston Beer sold 59,000 thousand 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, assum that Boston Beer 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 $30.10 million. a. Compute the break-even number of barrels for the current year. Round to the nearest thousand of barrels. thousand barrels b. Compute the anticipated break-even number of barrels for the following year. Round to the nearest thousand of barrels. thousand barrels
Break-even sales The Boston Beer Company Inc. (SAM) produces Samuel Adams beer and other alcoholic beverages. Boston Beer reported the following operating information for a recent year (in thousands): Sales Cost of goods sold $8,496,000 $2,124,000 Selling, general, and administrative expenses 944,000 (3,068,000) Operating income $5,428,000* *Before special items In addition, assume that Boston Beer sold 59,000 thousand 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, assum that Boston Beer 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 $30.10 million. a. Compute the break-even number of barrels for the current year. Round to the nearest thousand of barrels. thousand barrels b. Compute the anticipated break-even number of barrels for the following year. Round to the nearest thousand of barrels. thousand barrels
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Break-even sales
The Boston Beer Company Inc. (SAM) produces Samuel Adams beer and other alcoholic beverages. Boston Beer reported the following
operating information for a recent year (in thousands):
Sales
Cost of goods sold
Selling, general, and administrative expenses
Operating income
*Before special items
$2,124,000
$8,496,000
944,000 (3,068,000)
$5,428,000*
In addition, assume that Boston Beer sold 59,000 thousand 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 Boston Beer 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 $30.10 million.
a. Compute the break-even number of barrels for the current year. Round to the nearest thousand of barrels.
thousand barrels
b. Compute the anticipated break-even number of barrels for the following year. Round to the nearest thousand of barrels.
thousand barrels
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