Question
Sussex Co's entire machine capacity is used to produce essential components. The variable costs of using the machines are $13,000 and the fixed costs
Sussex Co's entire machine capacity is used to produce essential components. The variable costs of using the machines are $13,000 and the fixed costs are $52,000. If all the components were purchased from an outside supplier, the machines could be used to produce other items which would earn a total contribution of $25,000. What is the maximum price that Sussex Co should be willing to pay to the outside supplier for the components, assuming there is no change in fixed costs? Maximum price to be paid is: es
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