Chapter 6, Problem 12E

Break-even sales

Anheuser-Busch InBev SA/NV (BUD) reported the following operating information for a recent year (in millions):

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.

1. 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.
2. b. Compute the anticipated break-even number of barrels for the following year. Round to one decimal place in millions of barrels.