Question

Alter Bridge Mfg., Inc., is currently operating at only 88 percent of fixed asset capacity. Current sales are $720719. Fixed assets are $425242 and sales are projected to grow to $1070470. How much in new fixed assets are required to support this growth in sales? (round 2 decimal places)

Answer 1

Answer---Fixed assets required= $    5,55,811.28

Current sales	$    7,20,719.00
Present Fixed assets	$    4,25,242.00
Present capacity	88%
Sales at 100%Vcapacity (720719/88 x 100)	$    8,18,998.86
Sales expected	$ 10,70,470.00
Fixed assets required to achieve new sales (425242/818998.86 x 1070470)	$    5,55,811.28
Differential fixed assets required	$    1,30,569.28