Excess capacity adjustments

Tink Inc. had sales of $$1,400,000$ last year on fixed assets of $$380,000.$ Given that Tink's fixed assets were being used at only $95\mathrm{.}00\%$ of capacity, then the firm's fixed asset turnover ratio $($rounded to three decimal places$)$ was

Tink was using its fixed assets at only $95\mathrm{.}00\%$ of capacity last year. How much sales could the firm have supported last year with its current level of fixed assets?

$$1,326,316$

$$1,473,684$

$$1,621,052$

$$1,768,421$

When you consider that Tink's fixed assets were being underused, its target fixed assets to sales ratio should be

When you consider that Tink's fixed assets were being underutilized, Tink must raise in additional fixed assets to support its expected sales next year.