Question 1. Presuming that Mountain Man (i.e., MM) light beer were introduced in 2006, please undertake a breakeven analysis and find out the number of barrels of MM Light that will be required to be sold in 2006, IF the firm wants to maintain the same profit levels as it has even in 2005.

As is given in the case, please assume that regular MM regular beer losses 5% of its sales once MM Light beer is introduced

Net Revenues=50440000

COGS=34803600

Gross Margin=15636400

SG&A=9583600

Other Operating Expenses=1412320

Operating Margin=4640480

Other Income=151320

Net Income Before Taxes=4791800

Provision for Income Taxes=1677130

Net Income after Taxes=3114670

$2.25=price for 12-ounce beer

$4.99=price for six-pack

sold over 520,000 barrels

variable cost per barrel=$66.93