Tree Top Furniture has current sales of $287,600 and fixed assets of $314,000.The firm is currently operating at 96 percent of capacity.What is the maximum percentage increase the firm can have in sales without investing in additional fixed assets?
A)4.17%
B)4.00%
C)6.72%
D)3.92%
E)6.33%

Question

Quizplus · Accepted Answer

Maximum output = $287,600 / 0.96 = $299,583.33 Maximum percentage increase = ($299,583.33 - $287,600)/ $287,600 = 0.0417,or 4.17%

Tree Top Furniture Has Current Sales of $287,600 and Fixed