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Stavos Company's Screen Division manufactures a standard screen for high-definition televisions (HDTVS). The cost per screen follows: $121 Variable cost per screen Fixed cost per
Stavos Company's Screen Division manufactures a standard screen for high-definition televisions (HDTVS). The cost per screen follows: $121 Variable cost per screen Fixed cost per screen Total cost per screen 35* $156 "Based on a capacity of 750,000 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 $192 per screen for all sales. The costs, revenue, and net operating Income associated with the Quark Division's HDTV are given below. Selling price per unit $584 Variable cost per unit: Cost of the screen $192 Variable cost of 231 electronic parts Total variable cost 423 Contribution margin 161 Fixed costs per unit 90+ Net operating income per $ 71 unit "Based on a capacity of 210,000 units per year. The Quark Division has an order from an overseas source for 5.400 HDTVs. The overseas source wants to pay only $402 per unit. Required: 1. Assume the Quark Division has enough idle capacity to fill the 5,400-unit order. Is the division likely to accept the $402 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 $402 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 $402 unit price. Answer is not complete. Complete this question by entering your answers in the tabs below. 1 Required Required Required 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 $402 price? (Any "Financial Disadvantage" amounts should be entered as a negative.) Show less Financial advantage (disadvantage) on a per unit basis 1 Required Required Required 2 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 $402 unit price. (Any "Financial Disadvantage" amounts should be entered as a negative.) Show less Financial advantage (disadvantage) on a per unit basis
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