Break-Even Sales

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

Sales$47,063Cost of goods sold$18,756Selling, general and administration12,999$31,755Income from operations$15,308**Before special items

In addition, assume that Anheuser-Busch InBev sold 400 million barrels of beer during the year. Assume thatvariable costswere 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, andfixed coststo 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. Round to one decimal place in millions of barrels.)

million barrels

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

million barrels