What is the total incremental cost of purchasing

Assignment Help Accounting Basics
Reference no: EM132521878

Question - Cola Cola 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. In order to reduce costs the company located an independent producer in Alberta who is willing to sell 30,000 containers at $20 each, delivered to Cola Cola Company's shipping division in Alberta. The company's Shipping Division in Alberta can ship the 30,000 containers at a variable cost of $2.50 per container and a full cost, based on practical capacity, of $4.00 per container. When the company's Alberta shipping division ships for external customers is charges $6.00 per container.

1) What is the total cost to Cola Cola Company if the carbonated water is purchased from the local supplier?

A) $900,000

B) $1,200,000

C) $975,000

D) $1,080,000

E) $1,620,000

2) What is the total incremental cost of purchasing the water from the independent producer and shipping it to the Soda Division if the company's Alberta shipping division has idle capacity?

A) $600,000

B) $675,000

C) $720,000

D) $816,000

E) $780,000

3) What is the opportunity cost for Cola Cola Company from continuing to purchase the water from the local supplier if the company's Alberta shipping division has sufficient idle capacity?

A) $600,000

B) $60,000

C) $105,000

D) $180,000

E) $0

4) What is the daily operating advantage (disadvantage) of purchasing the water from the independent producer and using the company's Alberta shipping department, assuming the shipping department is currently shipping 50,000 containers per day for external customers?

A) $0

B) $45,000

C) $225,000

D) $120,000

E) $165,000

Reference no: EM132521878

Questions Cloud

What is the profit margin and gross profit rate : In its income statement for the year ended December 31, 2018, Alpen Company reported the condensed data. What is the profit margin and gross profit rate
Calculate the wavelength of the waves : Two sources are 7.2 cm apart and vibrate in phase at 7.0 Hz. A point on the third nodal line is 30.0 cm from one source and 37 cm from the other.
How long do the batteries on the space probe : How long do the batteries on the space probe last as measured by mission control on Earth? (Ignore the delay between the time the battery fails
Should brian and nancy open the restaurant : Computer number of meals in an hour of sales revenue that will be required to earn an income of $75,000 how many meals must the Soon's serve to earn
What is the total incremental cost of purchasing : What is the total incremental cost of purchasing the water from the independent producer and shipping it to the Soda Division
Intelligence reform and terrorist prevention act : Title II of the Intelligence Reform and Terrorist Prevention Act outlines the improvement of the intelligence capabilities of the FBI.
What is the atomic mass of unknown particle : One naturally occuring reaction in a radioactive decay process is nitrogen-12 (atomic number 7) decaying into carbon-12 (atomic number 6) plus an unknown
Explain the roles of government-society : Explain the roles of government, society, and family in stabilizing any of these resources.
Prepare the company cash budget for the upcoming fiscal year : The company's beginning cash balance for the upcoming fiscal year will be $28,000. Prepare the company's cash budget for the upcoming fiscal year

Reviews

Write a Review

Accounting Basics Questions & Answers

  Company has 6000 units in beginning work in process 30

company has 6000 units in beginning work in process 30 complete as to conversion costs 60000 units transferred out to

  Operating expenses other than depreciation for the year

operating expenses other than depreciation for the year were 400000. prepaid expenses increased by 17000 and accrued

  Discuss problem related to the adjusting entry

A company takes out a two year fire insurance policy costing $28905.07 on May 1, 20 x 4. The cost of the policy was debited to the Insurance Expense account.

  Mclaughlin corporation uses the allowance method

Describe the appropriate accounting treatment and required disclosures for McLaughlin's underestimation of bad debts at the end of 2011.

  Calculate the factory overhead rate for the year

Using the single plantwide factory overhead rate based on direct labor hours, calculate the factory overhead rate for the year

  Assignment of income doctrine

Explain the Assignment of Income Doctrine (AID) and the "fruit-of-the-tree" doctrine. What role does the AID play in our federal income tax system, and what could be done to avoid or reduce income taxes if the AID did not exist?

  Research about virtual teams

Based on the research about virtual teams from Unit 2, how effective was your Simulation team? What were the strengths and what were the greatest challenges? What could have been done to improve your team experience? What was the impact of the Ins..

  Discuss shareholders equity under both us gaap and ifrs

What is 2010 Gumbo Corp net income and shareholders' equity under both US GAAP and IFRS

  Rankine company estimates its bad debts expense by aging

rankine company estimates its bad debts expense by aging its accounts receivable and applying percentages to various

  Does trademark and patent really hurt anyone

Does trademark, patent, or copyright infringement really hurt anyone? Why or why not? Explain your position and provide examples.

  Estimate of administrative costs in a month

Based on the results of the controller's regression analysis, the estimate of administrative costs in a month with 1,090 credit hours would be

  What amount should be recorded for each sale

Main Street Distributors, a wholesale firm, made sales using the list prices and trade discounts. What amount should be recorded for each sale?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd