Stavos Company's Screen Division manufactures a standard screen for high-definition televisions (HDTVs). The cost per screen follows: Variable cost per screen Fixed cost per screen Total cost per screen $ 70 30* $ 100 *Based on a capacity of 10,000 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 $140 per screen for all sales. The costs, revenue, and net operating income associated with the Quark Division's HDTV are given below: $ 480 $ 140 210 Selling price per unit Variable cost per unit: Cost of the screen Variable cost of electronic parts Total variable cost Contribution margin Fixed costs per unit Net operating income per unit 350 130 80* $ 50 *Based on a capacity of 3,000 units per year. The Quark Division has an order from an overseas source for 1,000 HDTVs. The overseas source wants to pay only $340 per unit. Required: 1. Assume the Quark Division has enough idle capacity to fill the 1,000-unit order. Is the division likely to accept the $340 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 $340 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 $340 unit price. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 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 $340 price? (Any "Financial Disadvantage" amounts should be entered as a negative.) Financial advantage (disadvantage) on a per unit basis 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 $340 unit price. (Any "Financial Disadvantage" amounts should be entered as a negative.) Show less Financial advantage (disadvantage) on a per unit basis
