Thorpe Mfg., Inc., is currently operating at only 81 percent of fixed asset capacity. Current sales...
Thorpe Mfg., Inc., is currently operating at only 81 percent of fixed asset capacity. Current sales are $740,000. How fast can sales grow before any new fixed assets are needed? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
Homework Answers
Current sales at 81% of fixed asset capacity=$740,000
Sales at 100% capacity= 740,000/.81=913,580.24
Maximum Increase in sales without buying extra fixed assets=913,580.24-740,000=$173,580.24
Percentage increase in sales without needing new fixed assets=173,580.24/740,000= .2346 or 23.46%
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