Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Stavos Company's screen Division manufactures a standard screen for high-definition televisions (HDTVs). The cost per screen is: Variable cost per screen Fixed cost per screen
Stavos Company's screen Division manufactures a standard screen for high-definition televisions (HDTVs). The cost per screen is: Variable cost per screen Fixed cost per screen Total cost per screen $ 116 29 S 145 *Based on a capacity of 780,000 screen 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 charges $184 per screen for all sales. The costs, revenue, and net operating income associated with the Quark Division's HDTV are given below: $ 582 $ 184 233 Selling price per unit Variable costs 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 417 165 $ 78 *Based on a capacity of 190,000 units per year, The Quark Division has an order from an overseas source for 4,800 HDTVs. The overseas source wants to pay only $398 per unit. Required: 1. Assume that the Quark Division has enough idle capacity to fill the 4,800-unit order. Is the division likely to accept the $398 price or to reject it? Accept Reject 2. Assume that both the Screen Division and the Quark Division have idle capacity. Under these conditions, would it be advantageous for the company as a whole if the Quark Division rejects the $398 price Price offered por player Less variable costs per player Screen Division Quark Division 0 0 3. Assume that 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. Compute the profit impact to the Quark Division of accepting the 4,800-unit order at the $398 unit price. Price offered per player Less: Lost revenue from sales of Screen to outsiders Variable cost of Quark Division $
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