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

question 127

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 incremental cost of purchasing the water from the independent producer and shipping it to the Soda Division if the company's Manitoba shipping division has idle capacity?

• A)$600,000
• B)$675,000
• C)$720,000
• D)$816,000
• E)$780,000

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Definitions:

Chicken-Processing Plant

A facility involved in the slaughtering, processing, and packaging of chicken for food production and distribution.

Auto Parts Manufacturer

A company engaged in the production of components used in the assembly or repair of automobiles.

Performance-Based Pay

A compensation strategy where employees' pay is based on their performance, often measured by predetermined goals or benchmarks.

USPS

The United States Postal Service, an independent agency of the federal government responsible for providing postal service in the United States.