57.Assume that Major Manuscripts, Inc. is currently operating at 97 percent of capacity and that sales are projected to increase to $20,000. What is the projected addition to fixed assets

Complete Question:

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The projected addition to fixed assets is $1,533.33

Explanation:

Sales at 100% percent = Sales at current capacity/Current operating capacity

Since the Major Manuscripts, Inc. is currently operating at 97 percent of capacity of the net sales of $17,100

Sales at maximum capacity = 17,100/0.97

Sales at maximum capacity = $17,628.87

Projected to fixed assets = ([Current net fixed assets/Sales at maximum capacity]*Increase in sales) - Current net fixed assets  

Projected addition to fixed assets = ([$11,400/17,628.87]*20,000) - 11,400      Projected addition to fixed assets = ([$11,400/17,628.87]*20,000) - 11,400      Projected addition to fixed assets = 12,933.33 - 11,400        

Projected addition to fixed assets = 1,533.33

The projected addition to fixed assets is $1,533.33

reducing the scale of the market for a new product.

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