The Molding Division of Cotwold Company manufactures a plastic casing used by the Assembly Division. This casing is also sold to external customers for $25 per unit. Variable costs for the casing are $12 per unit and fixed cost is $3 per unit. Cotwold executives would like for the Molding Division to transfer 8,000 units to the Assembly Division at a price of $18 per unit. Assume the Molding Division is operating at full capacity. Required: 1. Should it accept the transfer price proposed by management? 2. Identify the minimum transfer price that the Molding Division will accept. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Should it accept the transfer price proposed by management? Should it accept the transfer price proposed by management? Required 1 Required 2 >
The Molding Division of Cotwold Company manufactures a plastic casing used by the Assembly Division. This casing is also sold to external customers for $25 per unit. Variable costs for the casing are $12 per unit and fixed cost is $3 per unit. Cotwold executives would like for the Molding Division to transfer 8,000 units to the Assembly Division at a price of $18 per unit. Assume the Molding Division is operating at full capacity. Required: 1. Should it accept the transfer price proposed by management? 2. Identify the minimum transfer price that the Molding Division will accept. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Should it accept the transfer price proposed by management? Should it accept the transfer price proposed by management? Required 1 Required 2 >
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter10: Decentralization: Responsibility Accounting, Performance Evaluation, And Transfer Pricing
Section: Chapter Questions
Problem 4CE
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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 $25 per unit. Variable costs for the casing are $12 per unit and fixed cost is $3 per unit. Cotwold executives
would like for the Molding Division to transfer 8,000 units to the Assembly Division at a price of $18 per unit.
Assume the Molding Division is operating at full capacity.
Required:
1. Should it accept the transfer price proposed by management?
2. Identify the minimum transfer price that the Molding Division will accept.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Should it accept the transfer price proposed by management?
Should it accept the transfer price proposed by management?
Required 1
Required 2 >](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F1341decc-8dec-4d41-bf9b-f8cce7b2aabd%2F0082332f-cff2-4f62-adb6-a6926599fa5b%2F3ulkzef_processed.jpeg&w=3840&q=75)
Transcribed Image Text:The Molding Division of Cotwold Company manufactures a plastic casing used by the Assembly Division. This casing is also sold to
external customers for $25 per unit. Variable costs for the casing are $12 per unit and fixed cost is $3 per unit. Cotwold executives
would like for the Molding Division to transfer 8,000 units to the Assembly Division at a price of $18 per unit.
Assume the Molding Division is operating at full capacity.
Required:
1. Should it accept the transfer price proposed by management?
2. Identify the minimum transfer price that the Molding Division will accept.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Should it accept the transfer price proposed by management?
Should it accept the transfer price proposed by management?
Required 1
Required 2 >
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