Complete Question:
Check the attached file for the complete question
Answer:
The projected addition to fixed assets is $1,533.33
Explanation:
Sales at 100% percent = Sales at current capacity/Current operating capacity
Since the Major Manuscripts, Inc. is currently operating at 97 percent of capacity of the net sales of $17,100
Sales at maximum capacity = 17,100/0.97
Sales at maximum capacity = $17,628.87
Projected to fixed assets = ([Current net fixed assets/Sales at maximum capacity]*Increase in sales) - Current net fixed assets
Projected addition to fixed assets = ([$11,400/17,628.87]*20,000) - 11,400 Projected addition to fixed assets = ([$11,400/17,628.87]*20,000) - 11,400 Projected addition to fixed assets = 12,933.33 - 11,400
Projected addition to fixed assets = 1,533.33
The projected addition to fixed assets is $1,533.33
