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  3. consider the following scenario: company a contrac

Consider the following scenario: Company A contracts with Company B to supply widgets. At ...

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Accounting

Consider the following scenario: Company A contracts with Company B to supply widgets. At

the time of signing the contract, A calculates that it will cost $5000 to make the widgets and B

promises to pay $10 000 for the widgets which it plans to sell in turn for $15 000.

Suddenly an unexpected jump in material prices (an unfortunate contingency) raises the cost

of As widget production run to $20 000. Given this background, show how efficient breach

would work among the contracting parties.

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