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Stavos Company's Screen Division manufactures a standard screen for high$-$definition televisions $($HDTVs$).$ The cost per screen is:

Variable cost per screen $$122$

Fixed cost per screen $32**$

Total cost per screen $$154$

$*Basedon$ a capacity $of810,000$ 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 $$199$ per screen for all sales.

The net operating income associated with the Quark Division's HDTV is computed as follows:

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

$*$Based on a capacity of $180,000$ units per year.

$$584$

The Quark Division has an order from an overseas source for $4,900$ HDTVs$.$ The overseas source wants to pay only $$410$ per unit.

Required:

Assume the Quark Division has enough idle capacity to fill the $4,900-$unit order. Is the division likely to accept the $$410$ price or to

reject it$?$

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?

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?

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