Anheuser-Busch InBev Companies, Inc reported the following operating information for a recent year. In addition assume that Anheuser-Busch InBev sold 200 million barrels of beer during the year. Assume that variable costs were 75% of the cost of goods sold and 40% 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 $225 million
A) compute the break-even number of barrels for the current year. Note: for the selling price per barrel and variable costs per barrel, round to the nearest cent. Also, round the break-even to the nearest barrel.
B) Compute the anticipated break-even number of barrels for the following year.
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To compute the break-even number of barrels for the current year, we need to know the selling price per barrel, the variable costs per barrel, and the fixed costs.
First, we need to calculate the variable costs:
Variable costs = (Variable costs of goods sold * Number of barrels sold) + (Variable selling, general, and administrative expenses * Number of barrels sold)
Given that variable costs are 75% of the cost of goods sold and 40% of selling, general, and administration expenses, we can calculate them as:
Variable costs of goods sold = 75% * Cost of goods sold
Variable selling, general, and administrative expenses = 40% * Selling, general, and administrative expenses
Next, we need to calculate the total costs:
Total costs = Variable costs + Fixed costs
Given that the remaining costs are fixed, we can directly calculate the total costs.
Finally, we can calculate the break-even number of barrels:
Break-even number of barrels = Total costs / (Selling price per barrel - Variable costs per barrel)
Now let's proceed with the calculations step by step:
A) Compute the break-even number of barrels for the current year:
1. Calculate the variable costs:
Variable costs of goods sold = 0.75 * Cost of goods sold
Variable selling, general, and administrative expenses = 0.40 * Selling, general, and administrative expenses
2. Calculate the total costs:
Total costs = Variable costs + Fixed costs
3. Calculate the break-even number of barrels:
Break-even number of barrels = Total costs / (Selling price per barrel - Variable costs per barrel)
B) Compute the anticipated break-even number of barrels for the following year:
To compute the anticipated break-even number of barrels for the following year, we need to consider the increase in fixed costs due to new distribution and general office facilities. The new fixed costs will be added to the total costs calculation.
1. Calculate the variable costs (same as in the current year).
2. Calculate the total costs:
Total costs = Variable costs + (Fixed costs + Increase in fixed costs)
3. Calculate the break-even number of barrels (same as in the current year).
Please provide the specific values for the cost of goods sold, selling, general, and administrative expenses, selling price per barrel, and variable costs per barrel to proceed with the calculations.