Crush Company Makes Internal Transfers at 180% of Full Cost

question 38

Multiple Choice

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. To reduce costs, the company located an independent supplier in Missouri who is willing to sell 30,000 containers at $20 each, delivered to Crush Company's Shipping Division in Missouri. The company's Shipping Division in Missouri has excess capacity and can ship the 30,000 containers at a variable cost of $2.50 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)$1,501,000
• D)$1,620,000

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Definitions:

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The process of generating creative, spontaneous ideas from all members of a group without any criticism or judgment.

Organizational Structure Innovation

The process of modifying or creating new organizational structures to better support creativity, flexibility, and responsiveness to changes in the market or environment.

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The implementation of new business processes or the modification of existing processes to improve efficiency, quality, or performance.

Process Innovation

The development and implementation of new or improved production or delivery methods, enhancing efficiency, quality, or performance.