Reference no: EM132501207

Break-Even Sales

Anheuser-Busch InBev Companies, Inc., reported the following operating information for a recent year:

Sales$4,800,000

Cost of goods sold$1,200,000

Selling, general and administration420,000 $1,620,000

Income from operations$ 3,180,000

Before special items

• In addition, assume that Anheuser-Busch InBev sold 30,000 barrels of beer during the year. Assume that variable costs were 75% of the cost of goods sold and 50% of selling, general, and 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 $15,300.

Question a. Compute the break-even number of barrels for the current year. Round to the nearest whole barrel.

Question b. Compute the anticipated break-even number of barrels for the following year. Round to the nearest whole barrel.