Asked by Keandra Moffitt on May 08, 2024
Verified
Calculate the projected fixed assets needed given the following information: current sales = $275,000; current sales capacity = 75%; current fixed assets = $40,000; projected future sales = $475,000.
A) $11,818
B) $51,818
C) $12,818
D) $52,818
E) $60,818
Projected Sales
An estimate of the amount of sales that a company expects to achieve in a future period.
Fixed Assets
Long-term tangible assets used in operations, such as machinery, buildings, and equipment, which are not expected to be converted into cash in the short term.
Sales Capacity
The maximum level of sales that a company can achieve within a given period under normal operating conditions.
- Determine the required increase in fixed assets due to projected sales increases.
Verified Answer
Learning Objectives
- Determine the required increase in fixed assets due to projected sales increases.
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