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
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

Har

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
Expert Solution
steps

Step by step

Solved in 4 steps

Blurred answer
Knowledge Booster
Discontinuing operations for a product or a service line
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education