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3 points eBookPrintReferencesCheck my workCheck My Work button is now enabledItem 2 The Molding Division of Cotwold Company manufactures a plastic casing used by the

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eBookPrintReferencesCheck my workCheck My Work button is now enabledItem 2
The Molding Division of Cotwold Company manufactures a plastic casing used by the Assembly Division. This casing is also sold to external customers for $27 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 10,000 units to the Assembly Division at a price of $19 per unit. Assume that the Molding Division has excess capacity, but the Assembly Division requires the casing to be made from a specific blend of plastics. This would raise the variable cost per unit to $22.
Determine the mutually beneficial transfer price so that the two divisions equally split the profits from the transfer.

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