Break-even salesAnheuser-Busch InBev Companies, Inc., reported the followingoperating information for a recent year (in millions): Net sales $47,063 Cost of goods sold $18,756 Selling, general and administration 12,999   $31,755 Income from operations $15,308* *Before special items   In addition, assume that Anheuser-Busch InBev sold 400 million barrelsof beer during the year. Assume that variable costs were 75% of the costof goods sold and 50% of selling, general and administration expenses. Assume that the remaining costs are fixed. For the following year,assume that Anheuser-Busch InBev expects pricing, variable costs perbarrel, and Fixed costs to remain constant, except that new distributionand general office facilities are expected to increase fixed costs by $300million. a. Compute the break-even number of barrels for the current year.Note: For the selling price per barrel and variable costs per barrel,round to the nearest cent. Also present the break-even units inmillions of barrelsb. Compute the anticipated break-even number of barrels for thefollowing year.

Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter6: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 12E: Break-even sales Anheuser-Busch InBev SA/NV (BUD) reported the following operating information for a...
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Break-even sales
Anheuser-Busch InBev Companies, Inc., reported the following
operating information for a recent year (in millions):

Net sales $47,063
Cost of goods sold $18,756
Selling, general and administration 12,999
  $31,755
Income from operations $15,308*
*Before special items  

In addition, assume that Anheuser-Busch InBev sold 400 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 administration 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 $300
million.

a. Compute the break-even number of barrels for the current year.
Note: For the selling price per barrel and variable costs per barrel,
round to the nearest cent. Also present the break-even units in
millions of barrels
b. Compute the anticipated break-even number of barrels for the
following year.

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