Pum Mfg., Inc., is currently operating at only 78 percent of fixed asset capacit

Question

Pum Mfg., Inc., is currently operating at only 78 percent of fixed asset capacity. Current sales are $450,000. Sales can grow as fast as percent  before any new fixed assets are needed.

And then

Pum Mfg., Inc., is currently operating at only 90 percent of fixed asset capacity. Current sales are $642,000. Fixed assets are $597,000 and sales are projected to grow to $790,000.

How much in new fixed assets is required to support this growth in sales? (Do not include the dollar sign ($). Round your answer to 2 decimal places. (e.g., 32.16))

And then

Pum Mfg., Inc., is currently operating at only 90 percent of fixed asset capacity. Current sales are $642,000. Fixed assets are $597,000 and sales are projected to grow to $790,000.

Explanation / Answer

sales can grow upto=450000/78%

=576923

Hence the sales can grow by=(576923-450000)/450000*100

=28.205%

Sales at full capacity=642000/90%

=713333

Hence total fixed assets required=597000/713333*790000

=661163.86

Hence additional fixed costs=64163.86

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