Aerated Water Company Makes Internal Transfers at 180% of Full

Multiple Choice

Aerated Water 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 supplier in Missouri who is willing to sell 30,000 containers at $22 each,delivered to Aerated Water 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 $1.50 per container.What is the total cost to Aerated Water Company if the carbonated water is purchased from the local supplier?

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