Break-Even Sales

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

Sales		$5,440,000
Cost of goods sold	$1,360,000
Selling, general, and administrative expenses	544,000	1,904,000
Operating income		$3,536,000*
*Before special items

In addition, assume that Anheuser-Busch InBev sold 34,000 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 $18,400.

a. Compute the break-even number of barrels for the current year. Round to the nearest whole barrel. fill in the blank 1 barrels

b. Compute the anticipated break-even number of barrels for the following year. Round to the nearest whole barrel. fill in the blank 2 barrels

Break-Even Sales

Currently, the unit selling price of a product is $280, the unit variable cost is $230, and the total fixed costs are $560,000. A proposal is being evaluated to increase the unit selling price to $310.

a. Compute the current break-even sales (units). fill in the blank 1 units

b. Compute the anticipated break-even sales (units), assuming that the unit selling price is increased and all costs remain constant. fill in the blank 2 units