Homework Answers
Full Capacity Sales = 540000 / .94
Full Capacity Sales =$574468.085
Current percentage of fixed assets to full capacity sales: 420000 / 574468.085 = .73
Total dollar amount of fixed assets needed for sales: .73 * 760000 = $554800
New Fixed Assets = Total fixed assets at the new sales - Current level of fixed assets
New Fixed Assets = 554800 - 420000
New Fixed Assets = $134800
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