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:

Collectively Bargain

The process in which workers, through their unions, negotiate with their employers regarding employment terms such as wages, hours, and working conditions.

Independent Contractors

Individuals or entities hired to perform work for another entity as non-employees, responsible for their own taxes and benefits.

Federal Statutory Law

Laws enacted by the United States Congress that must be followed by all states and citizens.

Independent Contractor

An individual or entity hired to perform a specific task or project yet maintains control over how the task is carried out, distinguishing them from employees.