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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
Break-even sales and sales to realize income from operations
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For the current year ended March 31, Benatar Company expects fixed costs of $1,250,000, a unit variable cost of $140, and a unit selling price of $100.
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a.    Compute the anticipated break-even sales (units).
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b.    Compute the sales (units) required to realize income from operations of $150,000.
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Anheuser-Busch InBev Companies, Inc., reported the following operating information for a recent year (in  millions):
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|
Sales |
$39,758 |
|
Cost of goods sold |
$16,447 |
|
Selling, general and administration |
   10,578 |
|
 Income from operations |
$27,025 $12,733* |
|
*Before special items |
 |
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In addition, assume that Anheuser-Busch InBev sold 320 million barrels of beer during the year. Assume that variable costs were 70% 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 $400 million.
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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.
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b.   Compute the anticipated break-even number of barrels for the following year.
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