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How much additional sales will be necessary

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Question - Great Grape Juice company is operating at full capacity. Annual revenues are $50,000,000. Total costs are $45,000,000, of which 40% is fixed and 60% is variable. In considering the following scenarios, assume each is independent of the others. The company is considering expanding capacity. The additional capacity will add $10,000,000 in annual fixed costs. The contribution margin rate will not be impacted. How much additional sales will be necessary to justify the added capacity?

Reference no: EM133037614

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