Earleton Manufacturing Company has $2 billion in sales and $500,000,000 in fixed assets. Currently, the company's fixed assets are operating at 85% of capacity. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below. X Open spreadsheet a. What level of sales could Earleton have obtained if it had been operating at full capacity? Write out your answer completely. Round your answer to the nearest cent. $ b. What is Earleton's target fixed assets/sales ratio? Round your answer to two decimal places. % c. If Earleton's sales increase 30%, how large of an increase in fixed assets will the company need to meet its target fixed assets/sales ratio? Write out your answer completely. Do not round intermediate calculations. Round your answer to the nearest dollar.
Earleton Manufacturing Company has $2 billion in sales and $500,000,000 in fixed assets. Currently, the company's fixed assets are operating at 85% of capacity. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below. X Open spreadsheet a. What level of sales could Earleton have obtained if it had been operating at full capacity? Write out your answer completely. Round your answer to the nearest cent. $ b. What is Earleton's target fixed assets/sales ratio? Round your answer to two decimal places. % c. If Earleton's sales increase 30%, how large of an increase in fixed assets will the company need to meet its target fixed assets/sales ratio? Write out your answer completely. Do not round intermediate calculations. Round your answer to the nearest dollar.
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Transcribed Image Text:Earleton Manufacturing Company has $2 billion in sales and $500,000,000 in fixed assets. Currently, the company's fixed assets are
operating at 85% of capacity. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the
required analysis to answer the questions below.
X
Open spreadsheet
a. What level of sales could Earleton have obtained if it had been operating at full capacity? Write out your answer completely. Round
your answer to the nearest cent.
b. What is Earleton's target fixed assets/sales ratio? Round your answer to two decimal places.
%
c. If Earleton's sales increase 30%, how large of an increase in fixed assets will the company need to meet its target fixed assets/sales
ratio? Write out your answer completely. Do not round intermediate calculations. Round your answer to the nearest dollar.
Transcribed Image Text:Excess capacity
Sales
Fixed assets
% Fixed assets capacity
I
Cacluation of Full Capacity Sales:
Full capacity sales
O Calculation of Target Fixed Assets-to-Sales Ratlo:
1 Target fixed assets-to-sales ratio
2
3 % Sales increase
4
5 Calculation of Fixed Assets Increase Needed:
16
New sales level
17
Increase in fixed assets
18
$2,000,000,000.00
$500,000,000.00
85.00%
30.00%
Formulas
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E
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