Sandler Company Makes Internal Transfers at 180% of Full Cost

Multiple Choice

Sandler 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. To reduce costs, the company located an independent producer in Ohio who is willing to sell 30,000 containers at $20 each, delivered to Sandler Company's shipping division in Ohio. The company's Shipping Division in Ohio has excess capacity and can ship the 30,000 containers at a variable cost of $2.50 per container. is the total cost to Sandler Company if the carbonated water is purchased from the local supplier.

A) $1,620,000
B) $1,501,000
C) $900,000
D) $1,200,000