Azure Inc. has sales of $4,500 million, and it uses only 80 percent of its plant capacity. It can increase its sales to _____ without having to increase its plant and equipment.
A) $2,530 million
B) $4,125 million
C) $5,625 million
D) $6,150 million
E) $7,035 million

Question

Quizplus · Accepted Answer

If the plant is running at 80% capacity, it can still increase its output by another 20%. Therefore, it can increase its sales to 125% of its current sales, or $5,625 million (125% x $4,500 million), without having to increase its plant and equipment.

Azure Inc Has Sales of $4,500 Million, and It Uses Only