Answer:
1)Break Even Sales Volume in Units=105.789067 million barrels
2))Break Even Sales Volume in Units=114.0512569 million barrels
Explanation:
Break Even Sales Volume in Units= Fixed Costs/ Contribution Margin per unit
<em>Given</em>
<em>Molson-Coors</em>
<em> All figures in millions</em>
Sales $3,568
Cost of goods sold (2,164)
Gross profit $1,404
Marketing, general, and admin. expenses (1,052)
Operating income $352
<em>Molson-Coors</em>
<em> All figures in millions</em>
Sales $3,568
Variable Cost of goods sold (2,164)*70%= (15,14.8)
Variable Marketing, general, and admin. expenses (1,052)
*40%= (600.8)
Contribution Margin $1,452.4
Fixed Cost of Goods Sold 649.2
Marketing, general, and admin. expenses (1,052)
*60%= $ 631.2
Operating income $172
Break Even Sales Volume in Units= Fixed Costs/ Contribution Margin per unit
<em><u>When Fixed Costs are not increased in the current year.</u></em>
Break Even Sales Volume in Units= 649.2+631.2/12.1033 (millions)
1)Break Even Sales Volume in Units=105.789067 millions barrels
<em><u>When Fixed Costs are increased in the following year.</u></em>
Break Even Sales Volume in Units= 649.2+631.2+ 100/12.1033 (milions)
2))Break Even Sales Volume in Units=114.0512569 millions barrels
