**Williamson Industries Case Study: Fixed Assets and Sales Analysis***Background Information:*Williamson Industries has reported $3 million in sales and $2.838 million in fixed assets. Currently, the company’s fixed assets are operating at 90% of their capacity.**Questions:****a. Potential Sales at Full Capacity:**Calculate the sales level Williamson Industries could have achieved if operating at full capacity. Present your answer as a complete figure (e.g., $25,000,000 for 25 million). Please round your response to the nearest cent.**Answer Box:**_$_________________**b. Target Fixed Assets/Sales Ratio:**Determine Williamson's target fixed assets to sales ratio without rounding intermediate calculations. Round your final answer to two decimal places.**Answer Box:**_________%**c. Increase in Fixed Assets for Sales Growth:**Given a 14% increase in sales, understand how much Williamson’s fixed assets need to increase to align with the target fixed assets/sales ratio. Enter your answer completely, and indicate negative values with a minus sign. Avoid rounding during calculations, but round your final answer to the nearest cent.**Answer Box:**_$_________________This exercise focuses on understanding the implications of capacity utilization on sales potential and the strategic planning needed for asset management concerning sales growth.

(a) If fixed assets had been working in full capacity, sales = $3,000,000 / 90% = $3,333,333.33

Answered: Williamson Industries has $3 million in…

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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