Break-Even Sales Anheuser-Busch InBev SA/NV (BUD) reported the following operating information for a recent year (in millions): Sales $45,517 Cost of goods sold $17,803 Selling, general, and administrative expenses 14,439 (32,242) Operating income $13,275* *Before special items In addition, assume that Anheuser-Busch InBev sold 500 million 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 Anheuser-Busch InBev 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 $400 million. a. Compute the break-even number of barrels for the current year. In computing variable and fixed costs and per-barrel amounts, round to two decimal places. Round the break-even number of barrels to one decimal place. fill in the blank 1 million barrels b. Compute the anticipated break-even number of barrels for the following year. Round to one decimal place in millions of barrels. fill in the blank 2 million barrels
Break-Even Sales
Anheuser-Busch InBev SA/NV (BUD) reported the following operating information for a recent year (in millions):
| Sales | $45,517 | |
| Cost of goods sold | $17,803 | |
| Selling, general, and administrative expenses | 14,439 | (32,242) |
| Operating income | $13,275* | |
| *Before special items |
In addition, assume that Anheuser-Busch InBev sold 500 million 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 Anheuser-Busch InBev 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 $400 million.
a. Compute the break-even number of barrels for the current year. In computing variable and fixed costs and per-barrel amounts, round to two decimal places. Round the break-even number of barrels to one decimal place.
fill in the blank 1 million barrels
b. Compute the anticipated break-even number of barrels for the following year. Round to one decimal place in millions of barrels.
fill in the blank 2 million barrels
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 1 images
