EXCESS CAPACITY ADJUSTMENTS 1. osato chemicals inc had sales of $1,790,000 last

Question

EXCESS CAPACITY ADJUSTMENTS

1. osato chemicals inc had sales of $1,790,000 last year on fixed assets of $395,000. given that osato's fixed assets were being used at only 92% of capacity, then the firms fixed asset turnover ratio was____?

2. how much sales could osato chemicals inc. have supported with its current level of fixed assets? A. $1,655,522 B. $1,751,087 C. $1,945,652 D. $2,042,935

3. When you consider that Osato's fixed assets were being underused, what should be the firms target fixed asset to sales ratio? A. 23.35% B. 20.30% C. 24.36% D. 21.32%

4. Suppose Osato is forecasting sales growth of 19% for this year. if existing and new fixed assets are used at 100% capacity, the firms expected fixed-assets turnover ratio for this year is A. 5.172x B. 5.911x C. 5.665x D. 4.926

Explanation / Answer

1.

Fixed Assets Turnover Ratio = 1,790,000 / 363400 = 4.925 times

2.

Answer is option (C) $1,945,652

$1,790,000 x 100 / 92 = $1,945,652

3.

Answer is option (B) 20.30%

1945652 / 395000 = 20.30%

4.

Answer is option (B) 5.911x

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.