EX19-12 Break-even sales Obj, 3 on Anheuser-Busch InBev Companies, Inc., reporte

Question

EX19-12 Break-even sales Obj, 3 on Anheuser-Busch InBev Companies, Inc., reported the following operating infe els for a recent year (in millions): Sales Cost of goods sold Selling, general, and administration $47 063 $18,756 12,999 $31.755 $15,308* RLD Income from operations Before special items In addition, assume that Anheuser-Busch InBev sold 400 million barrels ing the year. Assum selling, general, and administration expenses. Assume th of beer dur- e that variable costs were 75% of the cost of goods sold and 50% of at the remaining costs are fixed. For r, assume that Anheuser-Busch InBev expects pricing, variable costs per barrel, nstant, except that new distribution and general office facilities are expected to increase fixed costs by $300 million. A. Compute the break-eve n number of barrels for the current year. (Note: For the selling price variable costs per barrel, round to the nearest cent. Round to one decimal place in millions of barrels.) B. Compute the anticipated break-even number of barrels for the following year. (Roun one decimal place in millions of barrels.)

Explanation / Answer

Preparation of contribution income statement -

A. BEP = Fixed cost / (Selling price per unit - variable cost per unit)

= 11188.5/(117.66 - 51.42)

= 11188.5/66.24

= 168.90

Preparation of contribution margin statement for the following year -

BEP = 11488.5/(117.66-51.42)

= 11488.5/66.24

= 173.43

Please comment in case of further clarification required/wrong answer.

in millions output 400 per unit sales 47063 117.66 variable cost : less COGS 18756*75% 14067 35.17 Selling, genral & Adm.(12999*50%) 6499.5 16.25 Total variable cost 20566.5 51.42 Contribution Margin 26496.5 66.24 Fixed Cost: less COGS (18756*25%) 4689 Selling, genral & Adm.(12999*50%) 6499.5 Total Fixed cost 11188.5 Income from operation 15308

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