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 $ 119 28* $ 147 *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 $190 per screen for all sales. The net operating income associated with the Quark Division's HDTV is computed as follows: $ 577 $190 236 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 426 151 89* $ 62 *Based on a capacity of 180,000 units per year. The Quark Division has an order from an overseas source for 4,700 HDTVs. The overseas source wants to pay only $410 per unit. Required: 1. Assume the Quark Division has enough idle capacity to fill the 4,700-unit order. Is the division likely to accept the $410 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 $410 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 $410 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 fill the 4,700-unit order. Is the division likely to accept the $410 price or to reject it? O Reject Accept Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Assume both the Scr Required 2 Un 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 $410 price? (Any "Financial Disadvantage" amounts should be entered as a negative.) Financial advantage (disadvantage) on a per unit basis Complete this question by entering your answers in the tabs below. 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 $410 unit price? (Any "Financial Disadvantage" amounts should be entered as a negative.) Show less Financial advantage (disadvantage) on a per unit basis
