PPT Slide
Q: If sales went up to $3,000, not $2,500, what would the FA requirement be?
A: Target ratio = FA/Capacity sales
= 500/2,667 = 18.75%.
Have enough FA for sales up to $2,667, but need FA for another $333 of sales:
?FA = 0.1875(333) = $62.5.
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