The Fruit Drink Company Makes Internal Transfers at 160% of Full

question 128

Multiple Choice

The Fruit Drink Company makes internal transfers at 160% of full cost.The Soda Refining Division purchases 40 000 containers of carbonated water per day,on average,from a local supplier who delivers the water for $40 per container via an external shipper.To reduce costs,the company located an independent supplier in Victoria who is willing to sell 40 000 containers at $30 each,delivered to The Fruit Drink Company's Shipping Division in Tasmania.The company's Shipping Division in Tasmania has excess capacity and can ship the 40 000 containers at a variable cost of $4.50 per container.What is the total cost of purchasing the water from the Victorian supplier and shipping it to the Soda Refining Division?

• A)$180 000
• B)$1 380 000
• C)$1 600 000
• D)$1 200 000

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Definitions:

Catharsis

A process of releasing and thereby providing relief from strong or repressed emotions.

Hypnosis

A state akin to trance characterized by focused concentration, diminished awareness of surroundings, and increased openness to suggestion.

Psychiatry

A branch of medicine focused on the diagnosis, treatment, and prevention of mental, emotional, and behavioral disorders.

Psychology

The scientific study of the human mind and its functions, especially those affecting behavior.