a $140 Stevens Company's Picture Tube (PT) Division manufactures a standard monitor for high definition TV's (HDTV:). The cost per screen is: Variable cost per screen $70 Fixed cost per screen $30* Total cost per screen $100 *Based on a capacity of $10,000 screens per year. The PT Division sells part of its output to outside manufacturers of HDTVs and part to Stevens Company's Nolan Division (a sister company), which produces an HDTV under its own name. The PT Division charges $140 per screen for all sales (intercompany and external). The costs, revenue, and net operating income associated with the Nolan Division's HDTV are given below: Selling price per unit: $ 480 Variable cost per unit: Cost of the screen Variable cost of electronic parts $210 Total variable cost $ 350 Contribution Margin $ 130 Fixed cost per unit $ 80* Net operating income per unit $ 50 Based on a capacity of 3.000 units per year. The Nolan Division has an order from an overseas source for 1,000 HDTV's. The overseas source wants to pay only $340 per unit. Required: 1. Assume the Nolan Division has enough idle capacity to fill the 1.000 unit order. Is the division likely to accept the $340 price or reject it? Explain. 2. Assume both the Picture Tube and Nolan Divisions 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 Nolan Division rejects the $340 price? 3. Assume the Nolan Division has idle capacity but that the Picture Tube 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 Nolan Division accepts the $340 unit price? 4. What conclusions do you draw concerning the use of market price as a transfer price in intra- company transactions