Crush Company makes internal transfers at 180% of full cost. The Soda Refining division
purchases 30,000 containers ofcarbonated 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 inMissouri has excess capacity and can ship the 30,000 containers at a variable cost of
$2.50 per container.
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