A firm has current sales of $2.4 million and fixed assets of $1.65 million. The firm...
A firm has current sales of $2.4 million and fixed assets of $1.65 million. The firm is currently operating at 88% of capacity. How high can the firm's sales go without requiring any additional fixed assets?
Multiple Choice
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$2.727 million
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$2.836 million
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$2.423 million
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$2.509 million
Homework Answers
We need to find the sales at 100% capacity given that operating with 88% capacity would generate a sales of $2.4 million.
Sales with 100% capacity = $2.4 million / 0.88
Sales with 100% capacity = $2.727 million (Option a)
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