The Boston Beer Company Inc. (SAM) produces Samuel Adams beer and other alcoholic beverages. Boston Beer reported
Question:
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):
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, rounded to the nearest thousand. In computing variable and fixed costs, round to the nearest thousand. In computing the per-barrel amounts, round to the nearest cent.
b. Compute the anticipated break-even number of barrels for the following year.
Step by Step Answer:
Financial And Managerial Accounting
ISBN: 9780357714041
16th Edition
Authors: Carl S. Warren, Jefferson P. Jones, William Tayler