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Question 3 (22 marks) All scenarios are independent of each other. Marks are awanded for all steps of the calculation, not just the final answer.

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Question 3 (22 marks) All scenarios are independent of each other. Marks are awanded for all steps of the calculation, not just the final answer. Scenario 1 Trout Company is considering introducing a new line of cell phones targeting the preteen population. Trout believes that if the cellphones can be priced competitively at $145, approximately $50,000 units can be sold. The controller has determined that an investment in new equipment totaling $9,890,000 will be required. Trout requires a minimum rate of return of 8% on all investments. Question a) Calculate the target cost per cell phone. b) Should Trout Company produce the preteen line of cell phones? Scenario 2 Valencia Orange Manufactures bottles in its Glass Division, which are then transferred to its Packaging Division. In the upcoming month, 425,000 bottles will be transferred to the Packaging Division from the Glass Division, where they are filled and then sold at $12 per bottle. The bottles can be sold from the Glass Division to other companies at $6.75 per bottle. The costs below relate to total manufacturing budgeted costs for the 100,000 bottles. Question Calculate the operating income for the Packaging Division assuming a "market price" transfer pricang strategy is used

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