The Boston Beer Company Inc. (SAM) produces Samuel Adams beer and other alcoholic beverages. Boston Beer reported the following operating information for a recent year (in thousands): Sales Cost of goods sold Selling, general, and administrative expenses Operating income *Before special items $1,736,432 $921,980 565,779 (1,487,759) $248,673* In addition, assume that Boston Beer sold 7,400 thousand barrels of beer during the year. Assume that variable costs were 75% of the cost of goods sold and 40% of selling, general, and administrative expenses. Assume that the remaining costs are fixed. For the following year, assume that Boston Beer 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 $50 million. a. Compute the break-even number of barrels for the current year. Round to the nearest thousand of barrels. In computing variable and fixed costs, round to the nearest thousand. In computing the per-barrel amounts, round to the nearest cent. thousand barrels b. Compute the anticipated break-even number of barrels for the following year. Round to the nearest thousand of barrels. thousand barrels

The Boston Beer Company Inc. (SAM) produces Samuel Adams beer and other alcoholic beverages. Boston Beer reported the following operating information for a recent year (in thousands): Sales Cost of goods sold Selling, general, and administrative expenses Operating income Before special items $1,736,432 $921,980 565,779 (1,487,759) $248,673 In addition, assume that Boston Beer sold 7,400 thousand barrels of beer during the year. Assume that variable costs were 75% of the cost of goods sold and 40% of selling, general, and administrative expenses. Assume that the remaining costs are fixed. For the following year, assume that Boston Beer 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 $50 million. a. Compute the break-even number of barrels for the current year. Round to the nearest thousand of barrels. In computing variable and fixed costs, round to the nearest thousand. In computing the per-barrel amounts, round to the nearest cent. thousand barrels b. Compute the anticipated break-even number of barrels for the following year. Round to the nearest thousand of barrels. thousand barrels

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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