Wood Refinishers currently has $298,900 in sales and is operating at 86 percent of the firm's capacity. The dividend payout ratio is 40 percent and cost of goods sold is $211,300. What is the full capacity level of sales?

Question

Quizplus · Accepted Answer

To find the full capacity level of sales, we can use the following formula:
Full Capacity Level of Sales = Sales / Operating Capacity %

We are given that the current sales are $298,900 and the operating capacity is 86%. Therefore,
Full Capacity Level of Sales = $298,900 / 0.86 = $347,558.14

The dividend payout ratio and cost of goods sold are not relevant in finding the full capacity level of sales.

Wood Refinishers Currently Has $298,900 in Sales and Is Operating