Break-Even Sales Anheuser-Busch InBev Companies, Inc., reported the following op

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Break-Even Sales Anheuser-Busch InBev Companies, Inc., reported the following operating information for a recent year (in millions of dollars): Net sales Cost of goods sold Selling, general and administration $47,063 $18,756 12,999 $31,755 $15,308* Income from operations Before special items In addition, assume that Anheuser-Busch InBev sold and 50% of selling, Busch InBev expects expected to increase fixed costs by $300 million. ld 400 million barrels of beer during the year. Assume that variable costs were 75% of the cost of goods general and administration expenses. Assume that the remaining costs are fixed. For the following year, assume that Anheuser pricing, variable costs per barrel I, and fixed costs to remain constant, except that new distribution and general office facilities are t 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 million barrels b. Compute the anticipated break-even number of barrels for the following year. million barrels Check My Work ? Previ Next

Explanation / Answer

Total Variable Fixed Cost of goods sold 18756 14067 4689 Selling and admin cost 12999 6499.5 6499.5 Total 31755 20566.5 11188.5 Total Per unit Net sales 47063 117.66 Less Total variable cost 20566.5 51.42 Contribution margin 26496.5 66.24 Breakeven in units = Fixed cost / contribution magin per unit Fixed cost 11188.5 Contribution margin per unit 66.24 number of barrells 168.91 Million b) New Fixed cost 11188.5 + 300 11488.5 Breakeven in units = Fixed cost / contribution magin per unit Fixed cost 11488.5 Contribution margin per unit 66.24 number of barrells 173.43 Million

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