Question
Break-Even Sales BeerBev, Inc., reported the following operating information for a recent year (in millions): Sales$7,744 Cost of goods sold $1,936 Gross profit $5,808 Marketing,
Break-Even Sales
BeerBev, Inc., reported the following operating information for a recent year (in millions):
Sales$7,744
Cost of goods sold $1,936
Gross profit $5,808
Marketing, general, and admin. expenses 792
Income from operations $ 5,016
Assume that BeerBev sold 44 million barrels of beer during the year, thatvariable costswere 75% of the cost of goods sold and 50% of marketing, general and administration expenses, and that the remaining costs are fixed. For the following year, assume that BeerBev 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 $26.4 million.
a.Compute the break-even sales (in barrels) for the current year. Round your answer to two decimal places. Enter your answers in millions.
___________million barrels
b.Compute the anticipated break-even sales (in barrels) for the following year. Round your answer to two decimal places. Enter your answers in millions.
_________________million barrels
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