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
Correct Answer:
Verified
Correct Answer:
Verified
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