The Molding Division of Cotwold Company manufactures a plastic casing used by the Assembly Division....
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Accounting
The Molding Division of Cotwold Company manufactures a plastic casing used by the Assembly Division. This casing is also sold to external customers for $41 per unit Variable costs for the casing are $28 per unit and fixed cost is $6 per unit. Cotwold executives would like for the Molding Division to transfer 24,000 units to the Assembly Division at a price of $35 per unit. Assume that the Molding Division has enough excess capacity to accommodate the request. Required: 1. Should the Molding Division accept the $35 transfer price proposed by management? Yes O No 2. Calculate the effect on the Molding Division's net income if it accepts the $35 transfer price. Not Income
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