accounts P3 doubt

[hardik]

a company manufactures one product. it has variable costs of $ 600,000 and fixed costs of $ 300,000.

if it bought all of its production from another supplier, it could use its existing machinery to make a contribution of $400,000. fixed costs would not change.

what is the maximum price the producer should pay to obtain all of its production from another supplier??????????????????

 

[parthrocks]

easy mann
it will be 1000000
see first of all we know that its makes a contribution of 400000 which means that we have the ability to pay our suppliers even more than we actually pay....thus we pay 600000 that is our variable cost to our suppliers as in return he/she gives us a particular return of output...and then we add the figures
see 600000 is our bugget and then 400000 is to be added as now we can pay more/..../and here hey have asked maximum amount thats why....i hope u understood !!!
chalo bye,...gn...sd
and BHAI tu reply bahu late thi kare che animate hu shahad repy no kari saiko bye....finally...