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)costs of goods sold
C)accounts receivable
D)fixed assets
E)long-term debt

Question

Quizplus · Accepted Answer

Operating at a certain percentage of capacity is directly related to the utilization of fixed assets. This information helps in projecting whether the firm needs to invest in more fixed assets to increase capacity or if it can meet projected sales with the current capacity.

A Firm Is Operating at 90 Percent of Capacity