Cold One Beverage Company reported the following operating information for a recent year (in millions):

Line Item Description	Amount
Net sales	$7,680
Cost of goods sold	(1,920)
Gross profit	$5,760
Selling, general, and admin. expenses	(768)
Operating income	$4,992

 

Assume that Cold One sold 48 million barrels during the year, variable costs were 70% of the cost of goods sold and 50% of selling, general, and administrative expenses, and that the remaining costs are fixed. For the following year, assume that Cold One 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 $28.8 million.

a.  Compute the break-even sales (barrels) for the current year. Round intermediate computations to the nearest cent and final answer up to the nearest whole barrel
 

b.  Compute the anticipated break-even sales (barrels) for the following year. Round intermediate computations to the nearest cent and final answer up to the nearest whole barrel

Answer rating: 100% (QA)

a Compute the breakeven sales barrels for the current year First we need to calculate total variable ... View the full answer