A company reported the following data for a recent year (in millions)

Sales $39, 758

CoGS $16, 447
Selling, gen & admin 10, 578
Income from operations $12,733

Assume that the firm sold 320 million barrels of beer during the year. Assume that variable costs were 70% of the CoGS and 40
What to do:
a. Compute the break even number of barrels, round off to the nearest barrel
Fixed cost/Unit contribution Margin
$52,491/$24,013.9
answer:$2.19

b. Compute unit contribution margin, total variable costs, and total fixed costs
Variable Cost
(COGS x .70) + (Selling Gen & Admin x .40)
($16,447 x .70) + ($10,578 x .40)
$11,512.9 + $4,231.2
answer:$15,744.1

Fixed Cost
Fixed costs = ($16,447 *30%) + ($10,578 *30%)
4,931.1+6,346.8
answer: $11,277.9

Unit Contribution Margin

Sales price - Variable Cost
$39,758 - $15,744.1
answer:$24,013.9
s were 70% of the CoGS and 40% of selling, gen and admin expenses, and remaining costs are fixed, except the new distribution and other
he new distribution and other expenses are expected to increase fixed costs by $400 million the following year.