Last year Wei Guan Inc. had $625 million in sales, and it had $270 million in fixed assets that were used at 65% of capacity. In millions, by how much could Wei Guan's sales increase before it is required to increase its fixed assets?

a. $400.48

b. $289.42

c. $336.54

d. $316.35

e. $302.88

c. $336.54 million

Explanation:

For computing the increase in sales, first we have to determine the full capacity of sales value which is shown below:

= Sales : capacity percentage given

= $625 million : 65%

= $961.54 million

So, the increase in sales would be

= Full capacity sales - given sales

= $961.54 million - $625 million

= $336.54 million