Using the attached document, please answer the following $4$ questions.

$1)$ Which bid should Mr$.$ Kenton accept? Why? Please provide a justification for your answer

based on profitability.

$2)$ Which bid maximizes profit for the company? Why? Please calculate the profits for all the

bids.

$3)$ Please describe a cost$-$plus pricing system that would lead to the transfer taking place. Be

specific about the mark$-$up added to cost $($i$.$e$.$ cost $+$ X$\%).$ The mark$-$up 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 mark$-$up$.$

$4)$ 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 $(1$ sentence$).$ Then list some advantages$/$disadvantage of the current transfer pricing

system relative to cost$-$plus pricing.