Element Electronics manufactures 220,000 55 inch 4K TVs each year. The variable and fixed costs of rework and repair the TVs are as follows: Click the icon to view the costs.) (Click the icon to view additional information) Requirement 1. Should Element Electronics change to the new component? Show your calculations, Relevant costs over the next year from changing to the new component equal Now calculate the cost savings and additional contribution margin if Element changes to the new component. Costs of quality items: Opportunity costs: Net relevant benefit Element Electronics change to the new component. Requirement 2. Suppose the estimate of 2.200 additional TVs sold is uncertain. What is the minimum number of additional TVs that Element Electronics needs to sell to justify adopting the new component? Based upon the incremental costs and revenues, O A. Element can justify investing in the new component only if they sell a minimum of 2,596 additional TVs. B. Element can justify investing in the new component only if they sell a minimum of 4,594 additional TVs. C. Element can justify investing in the new component without making any additional sales. D. Element can justify investing in the new component only if they sell a minimum of 396 additional TVs. ork and repair the TVs are as follows Rd Element Electronic's 4K 55 inch TV's have a quality problem that causes shadows in the picture. Its engineers suggest changing a key component in each TV. The new component will cost $19 more than the old one in the next year, however, Element Electronics expects that with the new componentit (1) save 9,700 hours of rework, (2) save 970 hours of customer support (3) move 200 fewer loads (4) save 9.800 hours of warranty repairs, and (5) soll an additional 2.200 4K TV, for a total contribution margin of $2.002,000 Element Electronics believes that even as it improves quality, it will not be able to save any of the food costs of rework or repair. Element Electronics uses a 1 year time horizon for this decision because it plans to introduce a SK TV at the end of the year RO R Na int Print Done - X Data table Oportunity Cout Contribution margin from increased sales Estimated forgone contribution margin and income on fost sales Number of TVs manufactured Repair Costs Rework Customer Warranty cost per Support cost Transportation repair cost hour per hour cost per load per hour $ 745 265 270 102 90 54 154 75 5 1725 BOS 4245 Variable Cont Fixed cost Total Cost Print Done Percentage of reworked products OD. Element can justify investing in the new component only if they sol a minimum Requirement 3. What other factors should managers at Element Electronics consider DA Higher quality also improves the morale of employees working in the company and their care and commitment improving processos B. Management should consider the ability to save on the foxed costs of twork, customer support, and warranty repairs DC Nonfinancial factors such as the reputation benefits of high quality that often cannot be quantified in torms of higher sales. This portains to both current customers continuing to buy from Requirement 1. Should Element Electronics change to the new component? Show your cale Relevant costs over the next year from changing to the new component equal Now calculate the cost savings and additional contribution margin if Element changes to the Costs of quality items: Number of TVs manufactured Percentage of reworked products Savings in customer-support costs Savings in rework costs Savings in transportation costs for parts d is uncertain. What is the mir Savings in warranty repair costs A. Element can jusuty invesung in the new component only if they sell a minimum of 2,596 B. Element can justify investing in the new component only if they sell a minimum of 4,594 O C. Element can justify investing in the new component without making any additional sales. D. Element can justify investing in the new component only if they sell a minimum of 396 ad Requirement 3. What other factors should managers at Element Electronics consider when makir A. Higher quality also improves the morale of employees working in the company and their ca B. Management should consider the ability to save on the foxed costs of rework, customer sup C. Nonfinancial factors such as the reputation benefits of high quality that often cannot be qua Element Electronics manufactures 220,000 55 inch 4K TVs each year. The variable and fixed costs of rework and repair the TVs are as follows: (Click the icon to view the costs.) (Click the icon to view additional information.) Read the requirements Opportunity costs Net relevant benefit Element Electronics change to the new component. Requirement 2. Suppose the estimate of 2,200 additional TVs sold is uncertain. What is the minimum number of additional TVs that Element Electronics needs to sell to justify adopting the new component? Based upon the incremental costs and revenues, O A. Element can justify investing in the new component only if they sell a minimum of 2,596 additional TVs. O B. Element can justify investing in the new component only if they sell a minimum of 4,594 additional TVs. OC. Element can justity investing in the new component without making any additional sales. OD. Element can justify investing in the new component only if they sell a minimum of 396 additional TVs. Requirement 3. What other factors should managers at Element Electronics consider when making their decision about changing to a new.component? (Select all that apply.) A. Higher quality also improves the morale of employees working in the company and their care and commitment to improving processes B. Management should consider the ability to save on the fixed costs of rework, customer support, and warranty repairs. c. Nonfinancial factors such as the reputation benefits of high quality that often cannot be quantified in terms of higher sales. This pertains to both current customers continuing to buy from Element Electronics and new customers. OD. None of the above because the cost of quality should be the only deciding factor