8. Problem 16.12

EXCESS CAPACITY

Earleton Manufacturing Company has $2 billion in sales and $900,000,000 in fixed assets. Currently, the company's fixed assets are operating at 85% of capacity.

1. 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 whole number. $
3. What is Earleton's target fixed assets/sales ratio? Round your answer to two decimal places. %
5. If Earleton's sales increase 25%, 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 whole number. $