To produce sales of $4,500,000, Azure Inc. uses only 80 percent of its plant capacity. Therefore, Azure can increase its sales to _____ without having to increase its plant and equipment.
A)$22,500,000
B)$3,600,000
C)$5,625,000
D)$5,400,000
E)$8,100,000

Question

To produce sales of $4,500,000, Azure Inc. uses only 80 percent of its plant capacity. Therefore, Azure can increase its sales to _____ without having to increase its plant and equipment. 
A)$22,500,000
B)$3,600,000
C)$5,625,000
D)$5,400,000
E)$8,100,000

Quizplus · Accepted Answer

Since Azure Inc. is currently using only 80% of its plant capacity to produce sales of $4,500,000, we can use the following proportion to determine how much sales can be produced using 100% of the plant's capacity:

80% capacity -> $4,500,000 sales
100% capacity -> x

Cross-multiplying, we get:

80% capacity * x = $4,500,000 sales * 100% capacity
0.80x = $4,500,000
x = $4,500,000 / 0.80
x = $5,625,000

Therefore, Azure can increase its sales to $5,625,000 without having to increase its plant and equipment. The correct answer is C.

To Produce Sales of $4,500,000, Azure Inc