Using the excess capacity scenario model, determine the percentage by which sales increase by given the following information: current sales = $1,000; sales capacity level = 75%.

Question

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If the current sales are $1,000 and the sales capacity level is 75%, this means that $1,000 represents 75% of the maximum capacity. To find the maximum capacity, we divide $1,000 by 0.75, which gives us approximately $1,333.33. To find the percentage increase to reach full capacity, we subtract the current sales from the maximum capacity ($1,333.33 - $1,000 = $333.33) and then divide by the current sales ($333.33 / $1,000), which gives us 0.3333 or 33.33%.

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