3 Problem 11-23 (Algo) Market-Based Transfer Price [LO11-3] Stavos Company's Screen Division manufactures a standard screen for high-definition televisions (HDTVs). The cost per screen is: Variable cost per screen 12.5 points Fixed cost per screen Total cost per screen $ 124 27* $ 151 *Based on a capacity of 790,000 screens per year. Part of the Screen Division's output is sold to outside manufacturers of HDTVs and part is sold to Stavos Company's Quark Division, which produces an HDTV under its own name. The Screen Division charges $194 per screen for all sales. The net operating income associated with the Quark Division's HDTV is computed as follows: Selling price per unit $ 580 Variable cost per unit: Cost of the screen $ 194 Variable cost of electronic parts 238 Total variable cost 432 Contribution margin 148 83* $ 65 Fixed costs per unit Net operating income per unit *Based on a capacity of 160,000 units per year. The Quark Division has an order from an overseas source for 5,100 HDTVs. The overseas source wants to pay only $408 per unit. Return to question The Quark Division has an order from an overseas source for 5,100 HDI VS. The overseas source wants to pay only $408 per unit. Required: 1. Assume the Quark Division has enough idle capacity to fill the 5,100-unit order. Is the division likely to accept the $408 price or to reject it? 2. Assume both the Screen Division and the Quark Division have idle capacity. Under these conditions, what is the financial advantage (disadvantage) for the company as a whole (on a per unit basis) if the Quark Division rejects the $408 price? 3. Assume the Quark Division has idle capacity but that the Screen Division is operating at capacity and could sell all of its screens to outside manufacturers. Under these conditions, what is the financial advantage (disadvantage) for the company as a whole (on a per unit basis) if the Quark Division accepts the $408 unit price? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Assume the Quark Division has enough idle capacity to fill the 5,100-unit order. Is the division likely to accept the $408 price or to reject it? Reject Accept < Required 1 Required 2 > Required: 1. Assume the Quark Division has enough idle capacity to fill the 5,100-unit order. Is the division likely to accept the $408 price or to reject it? 2. Assume both the Screen Division and the Quark Division have idle capacity. Under these conditions, what is the financial advantage (disadvantage) for the company as a whole (on a per unit basis) if the Quark Division rejects the $408 price? 3. Assume the Quark Division has idle capacity but that the Screen Division is operating at capacity and could sell all of its screens to outside manufacturers. Under these conditions, what is the financial advantage (disadvantage) for the company as a whole (on a per unit basis) if the Quark Division accepts the $408 unit price? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Assume both the Screen Division and the Quark Division have idle capacity. Under these conditions, what is the financial advantage (disadvantage) for the company as a whole (on a per unit basis) if the Quark Division rejects the $408 price? (Any "Financial Disadvantage" amounts should be entered as a negative.) Financial advantage (disadvantage) on a per unit basis $ 770 < Required 1 Required 3 > Required: 1. Assume the Quark Division has enough idle capacity to fill the 5,100-unit order. Is the division likely to accept the $408 price or to reject it? 2. Assume both the Screen Division and the Quark Division have idle capacity. Under these conditions, what is the financial advantage (disadvantage) for the company as a whole (on a per unit basis) if the Quark Division rejects the $408 price? 3. Assume the Quark Division has idle capacity but that the Screen Division is operating at capacity and could sell all of its screens to outside manufacturers. Under these conditions, what is the financial advantage (disadvantage) for the company as a whole (on a per unit basis) if the Quark Division accepts the $408 unit price? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Assume the Quark Division has idle capacity but that the Screen Division is operating at capacity and could sell all of its screens to outside manufacturers. Under these conditions, what is the financial advantage (disadvantage) for the company as a whole (on a per unit basis) if the Quark Division accepts the $408 unit price? (Any "Financial Disadvantage" amounts should be entered as a negative.) Financial advantage (disadvantage) on a per unit basis 840 < Required 2 Required 3 > Show less