Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Homework- Chapter 11 0 Saved References Stavos Company's Screen Division manufactures a standard screen for high-denition televisions (H DTVs). The cost per screen is: Variable
Homework- Chapter 11 0 Saved References Stavos Company's Screen Division manufactures a standard screen for high-denition televisions (H DTVs). The cost per screen is: Variable cost per screen $ 121 Fixed cost per screen 35* Total cost per screen $ 155 'Based on a capacity of 770,000 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 $198 per screen for all sales. The net operating income associated with the Quark Division's HDTV is computed as follows: Selling price per unit $ 583 Variable cost per unit: Cost of the screen $ 198 Variable cost of electronic parts 236 Total variable cost 434 Contribution margin 149 Fixed costs per unit 90* Net operating income per unit $ 59 'Based on a capacity of 230,000 units per year. The Quark Division has an order from an overseas source for 5,200 HDTVs. The overseas source wants to pay only $418 per unit. Required: 1. Assume the Quark Division has enough idle capacity to ll the 5,200u nit order. Is the division likely to accept the $418 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) ifthe Quark Division rejects the $418 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 nancial advantage (disadvantage) for the company as a whole (on a per unit basis) ifthe Quark Division accepts the $418 unit price? 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 ll the 5,200-unit order. Is the division likely to accept the $418 price or to reject it? Required 1 Required 2 Required 3 Assume both the Screen Division and the Quark Division have idle capacity. Under these conditions, what is the nancial advantage (disadvantage) for the company as a whole (on a per unit basis) if the Quark Division rejects the $418 price? (Any "Financial Disadvantage" amounts should be entered as a negative.) 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 $418 unit price? (Any "Financial Disadvantage" amounts should be entered as a negative.) Show less Financial advantage (disadvantage) on a per unit basis
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started