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 the Molding Division is operating at full capacity.

Required:

Should it accept the transfer price proposed by management?

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