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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 so Selling, general, and administrative expenses Operating income Before special items. $1,548,000 $6,192,000 774,000 (2,322,000) $3,870,000* In addition, assume that Boston Beer sold 43,000 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 $23.20 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

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 so Selling, general, and administrative expenses Operating income Before special items. $1,548,000 $6,192,000 774,000 (2,322,000) $3,870,000* In addition, assume that Boston Beer sold 43,000 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 $23.20 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

FINANCIAL ACCOUNTING
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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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 so Selling, general, and administrative expenses Operating income *Before special items $1,548,000 $6,192,000 774,000 (2,322,000) $3,870,000* In addition, assume that Boston Beer sold 43,000 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 $23.20 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
Transcribed Image Text: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 so Selling, general, and administrative expenses Operating income *Before special items $1,548,000 $6,192,000 774,000 (2,322,000) $3,870,000* In addition, assume that Boston Beer sold 43,000 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 $23.20 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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