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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
The Molding Division of Cotwold Company manufactures a plastic casing used by the Assembly Division This casing is also sold to external customers for $31 per unit Variable costs for the casing are $18 per unit and fixed cost is $4 per unit Cotwold executives would like for the Molding Division to transfer 14,000 units to the Assembly Division at a price of $21 per unit Assume that the Molding Division has enough excess capacity to accommodate the request Required: 1. Should the Molding Division accept the $21 transfer price proposed by management? Yes ONO 2. Calculate the effect on the Molding Division's net income if it accepts the $21 transfer price Het income
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