Requirement 1. Should Engine 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 Engine changes to the new component. Costs of quality items: Opportunity costs: Net relevant benefit Engine Electronics change to the new component. Requirement 2. Suppose the estimate of 2,300 additional TVs sold is uncertain. What is the minimum number of additional TVs that Engine Electronics needs to sell to justify adopting the new component? Based upon the incremental costs and revenues, A. Engine can justify investing in the new component only if they sell a minimum of 3,951 additional TVs. B. Engine can justify investing in the new component without making any additional sales. C. Engine can justify investing in the new component only if they sell a minimum of 5,873 additional TVs. D. Engine can justify investing in the new component only if they sell a minimum of 1,651 additional TVs. Requirement 3. What other factors should managers at Engine Electronics consider when making their decision about changing to a new component? (Select all that apply.) A. 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 Engine Electronics and new customers. B. Higher quality also improves the morale of employees working in the company and their care and commitment to improving processes. C. Management should consider the ability to save on the fixed costs of rework, customer support, and warranty repairs. D. None of the above because the cost of quality should be the only deciding factor. Data table Requirements 1. Should Engine Electronics change to the new component? Show your calculations. 2. Suppose the estimate of 2,300 additional TVs sold is uncertain. What is the minimum number of additional printing presses that Engine Electronics needs to sell to justify adopting the new component? 3. What other factors should managers at Engine Electronics consider when making their decision about changing to a new component? More info Engine Electronic's 4K55 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 $24 more than the old one. In the next year, however, Engine Electronics expects that with the new component it will (1) save 9,700 hours of rework, (2) save 960 hours of customer support, (3) move 315 fewer loads, (4) save 9,500 hours of warranty repairs, and (5) sell an additional 2,300 4K TVs, for a total contribution margin of $2,162,000. Engine Electronics believes that even as it improves quality, it will not be able to save any of the fixed costs of rework or repair. Engine Electronics uses a 1-year time horizon for this decision because it plans to introduce a \$KTV at the end of the year