Using the attached document, please answer the following questions.
Which bid should Mr Kenton accept? Why? Please provide a justification for your answer
based on profitability.
Which bid maximizes profit for the company? Why? Please calculate the profits for all the
bids.
Please describe a costplus pricing system that would lead to the transfer taking place. Be
specific about the markup added to cost ie cost X The markup should be added to each
transaction, so if multiple transactions within the company are required to assemble the finished
product, then each should receive the markup
Thinking beyond the transaction described in the case, should the corporate vice president
change the transfer pricing system? In your answer, please describe the current transfer pricing
system sentence Then list some advantagesdisadvantage of the current transfer pricing
system relative to costplus pricing.
