The Anheuser Busch Corporation reported the following operating information for a recent year (in millions):
Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $12,911
Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . $ 7,950
Marketing and distribution . . . . . . . . . . . . . . . . . . . 2,256
$10,206
Income from operations . . . . . . . . . . . . . . . . . . . . . $ 2,705*
*Before special items
In addition, Anheuser Busch sold 107 million barrels of beer during the year. Assume that variable costs were 70% of the cost of goods sold and 45% 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 $110 million.
Rounding to the nearest cent:
a. Compute the break-even sales (barrels) for the current year.
b. Compute the anticipated break-even (barrels) for the following year.