Using the excess capacity scenario model, determine the percentage by which sales increase by given the following information: current sales = $9,000; sales capacity level = 90%.
A) 10.10%
B) 11.11%
C) 12.12%
D) 13.13%
E) 14.14%

Question

Quizplus · Accepted Answer

The sales capacity level at 90% means that the current sales of $9,000 represent 90% of the maximum sales capacity. To find the maximum sales capacity, divide $9,000 by 0.90, which equals $10,000. The increase in sales to reach full capacity is $10,000 - $9,000 = $1,000. To find the percentage increase, divide the increase by the current sales and multiply by 100: ($1,000 / $9,000) * 100 = 11.11%.

Using the Excess Capacity Scenario Model, Determine the Percentage by Which