Use the Information Below to Answer the Following Question(s)

question 30

Multiple Choice

Use the information below to answer the following question(s) .Crush Company makes internal transfers at 180% of full cost.The Soda Refining division purchases 30,000 containers of carbonated water per day, on average, from a local supplier, who delivers the water for $30 per container via an external shipper.In order to reduce costs the company located an independent producer in Manitoba who is willing to sell 30,000 containers at $20 each, delivered to Crush Company's shipping division in Manitoba.The company's Shipping Division in Manitoba can ship the 30,000 containers at a variable cost of $2.50 per container and a full cost, based on practical capacity, of $4.00 per container.When the company's Manitoba shipping division ships for external customers is charges $6.00 per container.
-What is the total cost to Crush Company if the carbonated water is purchased from the local supplier?

• A)$900,000
• B)$1,200,000
• C)$975,000
• D)$1,080,000
• E)$1,620,000

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Definitions:

Aggregate Planning

The process of creating a production plan to meet demand over a medium-term horizon while minimizing costs.

Production Level

The quantity of goods or services produced within a specified period by a company, factory, or manufacturing plant.

Forecast Errors

Discrepancies between predicted values and actual outcomes in forecasting, which can arise due to unexpected market changes or inaccurate data.

Aggregate Planning

A marketing activity that ensures supply meets demand by adjusting production rates, workforce levels, and inventory stock.