The Molding Division of Cotwold Company manufactures a plastic casing used by the Assembly Division. This casing is also sold to external customers for $29 per unit. Variable costs for the casing are $16 per unit and fixed cost is $4 per unit. Cotwold executives would like for the Molding Division to transfer 12,000 units to the Assembly Division at a price of $20 per unit. Assume that the Molding Division has enough excess capacity to accommodate the request. Required: 1. Should the Molding Division accept the $20 transfer price proposed by management?

	No
	Yes

2. Calculate the effect on Molding Divisions net income if it accepts the $20 transfer price.