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Dok int int rences The Molding Division of Cotwold Company manufactures a plastic casing used by the Assembly Division. This casing is also sold to external customers for $32 per unit. Variable costs for the casing are $19 per unit, and fixed cost is $4 per unit. Cotwold executives would like for the Molding Division to transfer 15,000 units to the Assembly Division at a price of $24 per unit. Assume that the Molding Division has enough excess capacity to accommodate the request. Required: 1. Should the Molding Division accept the $24 transfer price proposed by management? 2. Calculate the effect on the Molding Division's net income if it accepts the $24 transfer price. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Should the Molding Division accept the $24 transfer price proposed by management? Should the Molding Division accept the $24 transfer price proposed by management? Required 2 > Yes

Dok int int rences The Molding Division of Cotwold Company manufactures a plastic casing used by the Assembly Division. This casing is also sold to external customers for $32 per unit. Variable costs for the casing are $19 per unit, and fixed cost is $4 per unit. Cotwold executives would like for the Molding Division to transfer 15,000 units to the Assembly Division at a price of $24 per unit. Assume that the Molding Division has enough excess capacity to accommodate the request. Required: 1. Should the Molding Division accept the $24 transfer price proposed by management? 2. Calculate the effect on the Molding Division's net income if it accepts the $24 transfer price. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Should the Molding Division accept the $24 transfer price proposed by management? Should the Molding Division accept the $24 transfer price proposed by management? Required 2 > Yes

Cornerstones of Cost Management (Cornerstones Series)
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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bok int int rences The Molding Division of Cotwold Company manufactures a plastic casing used by the Assembly Division. This casing is also sold to external customers for $32 per unit. Variable costs for the casing are $19 per unit, and fixed cost is $4 per unit. Cotwold executives would like for the Molding Division to transfer 15,000 units to the Assembly Division at a price of $24 per unit. Assume that the Molding Division has enough excess capacity to accommodate the request. Required: 1. Should the Molding Division accept the $24 transfer price proposed by management? 2. Calculate the effect on the Molding Division's net income if it accepts the $24 transfer price. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Should the Molding Division accept the $24 transfer price proposed by management? Should the Molding Division accept the $24 transfer price proposed by management? BINT Required 2 > Yes
Transcribed Image Text:bok int int rences The Molding Division of Cotwold Company manufactures a plastic casing used by the Assembly Division. This casing is also sold to external customers for $32 per unit. Variable costs for the casing are $19 per unit, and fixed cost is $4 per unit. Cotwold executives would like for the Molding Division to transfer 15,000 units to the Assembly Division at a price of $24 per unit. Assume that the Molding Division has enough excess capacity to accommodate the request. Required: 1. Should the Molding Division accept the $24 transfer price proposed by management? 2. Calculate the effect on the Molding Division's net income if it accepts the $24 transfer price. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Should the Molding Division accept the $24 transfer price proposed by management? Should the Molding Division accept the $24 transfer price proposed by management? BINT Required 2 > Yes
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