Based on its existing sales, what is the formula for calculating the full-capacity sales of a firm?
A)Full-capacity sales = Existing sales level ÷ Percent of capacity used to generate existing sales level
B)Full-capacity sales = Future sales level ÷ (1 - Percent of capacity used to generate existing sales level)
C)Full-capacity sales = Future sales level ÷ Percent of capacity used to generate existing sales level
D)Full-capacity sales = Future sales level ÷ (1 + Percent of capacity used to generate existing level of assets)
E)Full-capacity sales = Existing sales level ÷ (1 - Percent of capacity used to generate existing level of assets)

Question

Quizplus · Accepted Answer

Full-capacity sales can be calculated by dividing the existing sales level by the percent of capacity used to generate that level of sales. This formula gives the total sales that could be achieved if the firm was operating at full capacity.

Based on Its Existing Sales, What Is the Formula for Calculating