Question

Hodgkiss Mfg., Inc., is currently operating at only 90 percent of fixed asset capacity. Current sales are $720,000. Fixed assets are $440,000 and sales are projected to grow to $850,000. How much in new fixed assets are required to support this growth in sales? Assume the company wants to operate at full capacity. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Answer 1

Answer:

How much in new fixed assets are required to support this growth in sales?

x= 81818,18 New fixxed assets

Explanation:

Today  

720000  

440000  

90%  

 

440000 90%  

x=      100%  

x=488888,88

 

488888,8889 x  

440000 720000  

 

x= 800000 Full capacity sales

850000 expected sales

 

 

50000 x  

440000 720000  

 

x= 81818,18182 New fixxed assets