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1- The Molding Division of Cotwold Company manufactures a plastic casing used by the Assembly Division. This casing is also sold to external customers for
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The Molding Division of Cotwold Company manufactures a plastic casing used by the Assembly Division. This casing is also sold to external customers for $25 per unit Variable costs for the casing are $12 per unit and fixed cost is $3 per unit . Cotwold executives would like for the Molding Division to transfer 8,000 units to the Assembly Division at a price of $18 per unit. Assume the Molding Division is operating at full capacity. Required: 1. Should it accept the transfer price proposed by management? Yes O No 2. Identify the minimum transfer price that the Molding Division will accept Minimum Transfer Price Step by Step Solution
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