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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 externalshipper. In order to reduce costs, the company located an independent producer in Missouri who is willing to sell 30,000containers 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.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M994019

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