03-15-2009, 04:30 AM
can any one solve this?
A company manufactures one product. Variable costs are $600,000. Fixed Costs are $300,000. If it bought the product from another supplier, it could use existing machinery to make a contribution of $400,000. Fixed Costs would not change.
What is the maximum price it should pay to obtain the product from another supplier.
A. $600,000
B. $700,000
C. $900,000
d. $1,000,000
A company manufactures one product. Variable costs are $600,000. Fixed Costs are $300,000. If it bought the product from another supplier, it could use existing machinery to make a contribution of $400,000. Fixed Costs would not change.
What is the maximum price it should pay to obtain the product from another supplier.
A. $600,000
B. $700,000
C. $900,000
d. $1,000,000
