Break-Even Sales Anheuser-Busch InBev SA/NV (BUD) reported the following operating information for a recent year: $5,904,000 Sales Cost of goods sold $1,476,000 Selling, general, and administrative expenses 410,000 1,886,000 Operating income $4,018,000*

Financial And Managerial Accounting
15th Edition
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:WARREN, Carl S.
Chapter5: Accounting For Retail Businesses
Section: Chapter Questions
Problem 41E: Cost of goods sold and related items The following data were extracted from the accounting records...
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Break-Even Sales
Anheuser-Busch InBev SA/NV (BUD) reported the
following operating information for a recent year:
$5,904,000
Sales
Cost of goods sold
$1,476,000
Selling, general, and administrative expenses 410,000
Operating income
*Before special items
1,886,000
$4,018,000*
In addition, assume that Anheuser-Busch InBev sold
41,000 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 $17,200.
a. Compute the break-even number of barrels for the
current year. Round to the nearest whole barrel.
barrels
b. Compute the anticipated break-even number of
barrels for the following year. Round to the nearest
whole barrel.
barrels
Transcribed Image Text:Break-Even Sales Anheuser-Busch InBev SA/NV (BUD) reported the following operating information for a recent year: $5,904,000 Sales Cost of goods sold $1,476,000 Selling, general, and administrative expenses 410,000 Operating income *Before special items 1,886,000 $4,018,000* In addition, assume that Anheuser-Busch InBev sold 41,000 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 $17,200. a. Compute the break-even number of barrels for the current year. Round to the nearest whole barrel. barrels b. Compute the anticipated break-even number of barrels for the following year. Round to the nearest whole barrel. barrels
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