Gandi Mfg., Inc., is currently operating at only 80% fixed asset capacity. Current sales are $610,000. How fast sales can grow before any new fixed asset are needed?

Answer 1

Given Gandi is currently generating $610k in sales on 80% fixed asset capacity, this would imply that the maximum potential sales would amount to $762.5k assuming 100% fixed asset utilization (610,000 / 80%). This is $152,500 in additional sales that can be generated before any growth capex is needed.