PR.19-06B.ALGO

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BE.19-06.ALGO

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Break-Even Sales

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

Sales	$4,992,000
Cost of goods sold	$1,248,000
Selling, general and administration	364,000
	$1,612,000
Income from operations	$ 3,380,000*
*Before special items

In addition, assume that Anheuser-Busch InBev sold 26,000 barrels of beer during the year. Assume that variable costs were 75% of the cost of goods sold and 50% of selling, general, and administration 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 $14,800.

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

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