A firm is operating at 90 percent of capacity. This information is primarily needed to project which one of the following account values when compiling pro forma statements?
A) Sales
B) Cost of goods sold
C) Accounts receivable
D) Fixed assets
E) Long-term debt

Question

Quizplus · Accepted Answer

Operating at 90 percent of capacity indicates that the firm may need to invest in additional fixed assets to increase capacity if sales are projected to grow.

A Firm Is Operating at 90 Percent of Capacity