The Molding Division of Cotwold Company manufactures a plastic casing used by the Assembly Division. This casing is also sold to

external customers for $$27$ per unit. Variable costs for the casing are $$14$ 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 enough excess capacity to accommodate the request.

Required:

Should the Molding Division accept the $$19$ transfer price proposed by management?

Calculate the effect on the Molding Division's net income if it accepts the $$19$ transfer price.

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