eBook Break-Even Sales Cold One Brewing Company reported the following operating information for a recent year (in millions): Sales $9,600 Cost of goods sold (2,400) Gross profit $7,200 Marketing, general, and admin. expenses (900) Income from operations $ 6,300 Assume that Cold One sold 50 million barrels of beer during the year, variable costs were 75% of the cost of goods sold and 50% of marketing, general, and administrative expenses, and that the remaining costs are fixed. For the following year, assume that Cold One expects pricing, variable co
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Break-Even Sales
Cold One Brewing Company reported the following operating information for a recent year (in millions):
Sales $9,600 Cost of goods sold (2,400) Gross profit $7,200 Marketing, general, and admin. expenses (900) Income from operations $ 6,300
Assume that Cold One sold 50 million barrels of beer during the year, variable costs were 75% of the cost of goods sold and 50% of marketing, general, and administrative expenses, and that the remaining costs are fixed. For the following year, assume that Cold One 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 $31.5 million.
a. Compute the break-even sales (barrels) for the current year. Round your answer to two decimal places. Enter your answers in millions.
fill in the blank 1 million barrelsb. Compute the anticipated break-even sales (barrels) for the following year. Round your answer to two decimal places. Enter your answers in millions.
fill in the blank 2 million barrels
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