Question - Anheuser-Busch companies, inc., reported the following operating information for a recent year (in millions):
Net sales 15,717.1
Cost of goods sold 10,165.0
Marketing and distribution 2,832.5
12,997.5
Income from operations 2,719.6*
*before special items
In addition, Anheuser Busch sold 125 million barrels of beer during the year. Assume that the variable costs were 75% of the cost of goods sold and 40% of marketing and distribution expenses. Assume that the remaining costs are fixed. For the following year, assume that Anheuser Busch 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 150 million.
Rounding to the nearest cent:
a. Compute the break even sales (barrels) for the current year.
b. Compute the anticipated break even sales (barrels) for the following year.