Anheuser-Busch Companies, Inc., reported the following operating information for a recent year (in millions): In addition, Anheuser-Busch
Question:
Anheuser-Busch Companies, Inc., reported the following operating information for a recent year (in millions):
In addition, Anheuser-Busch sold 125 million barrels of beer during the year. Assume that variable costs were 75% of the cost of goods sold and 40% of marketing and distribution expenses. Assume that the remaining costs are fixed. For the following year, assume that Anheuser-Busch 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 $150 million. Rounding to the nearest cent:(a) Compute the break-even sales (barrels) for the current year.(b) Compute the anticipated break-even sales (barrels) for the following year.
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