The Molding Division of Cotwold Company manufactures a plastic casing used by the Assembly Division. This casing is also
Posted: Wed Apr 27, 2022 11:16 am
The Molding Division of Cotwold Company manufactures a plastic
casing used by the Assembly Division. This casing is also sold to
external customers for $33 per unit. Variable costs for the casing
are $12 per unit and fixed cost is $4 per unit. Cotwold executives
would like for the Molding Division to transfer 16,000 units to the
Assembly Division at a price of $22 per unit. Assume that the
Molding Division has excess capacity, but the Assembly Division
requires the casing to be made from a specific blend of plastics.
This would raise the variable cost per unit to $28.
casing used by the Assembly Division. This casing is also sold to
external customers for $33 per unit. Variable costs for the casing
are $12 per unit and fixed cost is $4 per unit. Cotwold executives
would like for the Molding Division to transfer 16,000 units to the
Assembly Division at a price of $22 per unit. Assume that the
Molding Division has excess capacity, but the Assembly Division
requires the casing to be made from a specific blend of plastics.
This would raise the variable cost per unit to $28.
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