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QUESTION: Southern Mfg., Inc., is currently operating at only 94 percent of fixed asset capacity. Current sales are $740,000. Fixed assets are $450,000 and sales are projected to grow to $860,000. How much in new fixed assets are required to support this growth in sales? Assume the company maintains its current operating capacity.

QUESTION: Southern Mfg., Inc., is currently operating at only 94 percent of fixed asset capacity. Current sales are $740,000. Fixed assets are $450,000 and sales are projected to grow to $860,000. How much in new fixed assets are required to support this growth in sales? Assume the company maintains its current operating capacity.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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QUESTION: Southern Mfg., Inc., is currently operating at only 94 percent of fixed asset capacity. Current sales are $740,000. Fixed assets are $450,000 and sales are projected to grow to $860,000. How much in new fixed assets are required to support this growth in sales? Assume the company maintains its current operating capacity.
Transcribed Image Text:QUESTION: Southern Mfg., Inc., is currently operating at only 94 percent of fixed asset capacity. Current sales are $740,000. Fixed assets are $450,000 and sales are projected to grow to $860,000. How much in new fixed assets are required to support this growth in sales? Assume the company maintains its current operating capacity.
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