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 is operating at full capacity.

Required:

1.

Should it accept the transfer price proposed by management?

	Yes
	No

2.	Identify the minimum transfer price that the Molding Division will accept.