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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 $30 per unit. Variable costs for the casing are $17 per unit and fixed cost is $4 per unit. Cotwold executives would like for the Molding Division to transfer 13,000 units to the Assembly Division at a price of $23 per unit. Assume the Molding Division is operating at full capacity. Required: 1. Should it accept the transfer price proposed by management? Yes No 2. Identify the minimum transfer price that the Molding Division will accept nt Minimum Transfer Price ences

The Molding Division of Cotwold Company manufactures a plastic casing used by the Assembly Division. This casing is also sold to external customers for $30 per unit. Variable costs for the casing are $17 per unit and fixed cost is $4 per unit. Cotwold executives would like for the Molding Division to transfer 13,000 units to the Assembly Division at a price of $23 per unit. Assume the Molding Division is operating at full capacity. Required: 1. Should it accept the transfer price proposed by management? Yes No 2. Identify the minimum transfer price that the Molding Division will accept nt Minimum Transfer Price ences

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter10: Evaluating Decentralized Operations
Section: Chapter Questions
Problem 17E: Materials used by the Instrument Division of Ziegler Inc. are currently purchased from outside...
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Find the minimum transfer price
Homework Saved The Molding Division of Cotwold Company manufactures a plastic casing used by the Assembly Division. This casing is also sold to external customers for $30 per unit. Variable costs for the casing are $17 per unit and fixed cost is $4 per unit. Cotwold executives would like for the Molding Division to transfer 13,000 units to the Assembly Division at a price of $23 per unit. Assume the Molding Division is operating at full capacity. Required: 1. Should it accept the transfer price proposed by management? O Yes O No nt 2. Identify the minimum transfer price that the Molding Division will accept Minimum Transfer Price rences < Prev 8 of 12 Next > Graw Hill 1O Type here to search 13 SC & 2 Q W
Transcribed Image Text:Homework Saved The Molding Division of Cotwold Company manufactures a plastic casing used by the Assembly Division. This casing is also sold to external customers for $30 per unit. Variable costs for the casing are $17 per unit and fixed cost is $4 per unit. Cotwold executives would like for the Molding Division to transfer 13,000 units to the Assembly Division at a price of $23 per unit. Assume the Molding Division is operating at full capacity. Required: 1. Should it accept the transfer price proposed by management? O Yes O No nt 2. Identify the minimum transfer price that the Molding Division will accept Minimum Transfer Price rences < Prev 8 of 12 Next > Graw Hill 1O Type here to search 13 SC & 2 Q W
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