Break-even sales

The Boston Beer Company Inc. (SAM) produces Samuel Adams beer and other alcoholic beverages. Boston Beer reported the following operating information for a recent year (in thousands):

Line Item Description	Amount	Amount
Sales		$4,800,000
Cost of goods sold	$1,200,000
Selling, general, and administrative expenses	480,000	(1,680,000)
Operating income		$3,120,000*

*Before special items

In addition, assume that Boston Beer sold 30,000 thousand 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 Boston Beer 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 $16.20 million.

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

b. Compute the anticipated break-even number of barrels for the following year. Round to the nearest thousand of barrels. fill in the blank 1 of 1 thousand barrels

The Boston Beer Company Inc. (SAM) produces Samuel Adams beer and other alcoholic beverages. Boston Beer reported the following operating information for a recent year (in thousands): In addition, assume that Boston Beer sold 30,000 thousand 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 Boston Beer expects pricing, variable costs oer barrel, and fixed costs to remain constant, except that new distribution and general office facilities are expected to increase fixed costs by $16.20 million. a. Compute the break-even number of barrels for the current year. Round to the nearest thousand of barrels. X thousand barrels b. Compute the anticipated break-even number of barrels for the following year. Round to the nearest thousand of barrels. x thousand barrels Feedback Check My Work a. Fixed costs divided by the unit contribution margin equals break-even point in units. b. Repeat the calculations in (a) using anticipated amounts