Crush Company makes internal transfers at 165?% of full cost. The Soda Refining
ID: 2524048 • Letter: C
Question
Crush Company makes internal transfers at 165?% of full cost. The Soda Refining Division purchases 40 comma 900 containers of carbonated water per? day, on? average, from a local? supplier, who delivers the water for $ 50 per container via an external shipper. To reduce? costs, the company located an independent supplier in Illinois who is willing to sell 40 comma 900 containers at $ 32 ?each, delivered to Crush? Company's Shipping Division in Missouri. The? company's Shipping Division in Missouri has excess capacity and can ship the 40 comma 900 containers at a variable cost of $ 8.50 per container. What is the total cost of purchasing the water from the Illinois supplier and shipping it to the Soda? Division?
Explanation / Answer
It is assumed that 40 comma 900 containers as 40,900 containers.
Answer)
Total cost of purchasing the water from Illinois supplier and shipping it to soda division is:$1308800+$347650=$1656450
Cost of containers:(40,900 containers×$32)=$1308800
Company shipping division variable cost:($40900 containers×$8.5)=$347650
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