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10 December, 18:39

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

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  1. 10 December, 21:50
    0
    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
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