Watko Entertainment Systems (WES) buys audio and video components for assembling home entertainment systems from two suppliers, Bacon Electronics and Hessel Audio and Video. The components are delivered in cartons. If the cartons are delivered late, the installation for the customer is delayed. Delayed installations lead to contractual penalties that call for WES to reimburse a portion of the purchase price to the customer. During the past quarter, the purchasing and delivery data for the two suppliers showed the following: Bacon 5,000 $184 Bacon Hessel Total purchases (cartons) Average purchase price (per carton) Number of deliveries Percentage of cartons delivered late. The Accounting Department recorded $257,400 as the cost of late deliveries to customers. Effective Cost Per Carton Hessel 3,000 $200 40 30% Total 8,000 $ 190 60 25% 20 15% Required: Assume that the average quality, measured by the percentage of late deliveries, and prices from the two companies will continue as the past. Also assume that the number of components is the same for all deliveries from either company. What is the effective price fo cartons from the two companies when late deliveries are considered? Note: Do not round intermediate calculations. Round your answers to 2 decimal places.
Watko Entertainment Systems (WES) buys audio and video components for assembling home entertainment systems from two suppliers, Bacon Electronics and Hessel Audio and Video. The components are delivered in cartons. If the cartons are delivered late, the installation for the customer is delayed. Delayed installations lead to contractual penalties that call for WES to reimburse a portion of the purchase price to the customer. During the past quarter, the purchasing and delivery data for the two suppliers showed the following: Bacon 5,000 $184 Bacon Hessel Total purchases (cartons) Average purchase price (per carton) Number of deliveries Percentage of cartons delivered late. The Accounting Department recorded $257,400 as the cost of late deliveries to customers. Effective Cost Per Carton Hessel 3,000 $200 40 30% Total 8,000 $ 190 60 25% 20 15% Required: Assume that the average quality, measured by the percentage of late deliveries, and prices from the two companies will continue as the past. Also assume that the number of components is the same for all deliveries from either company. What is the effective price fo cartons from the two companies when late deliveries are considered? Note: Do not round intermediate calculations. Round your answers to 2 decimal places.
Essentials of Business Analytics (MindTap Course List)
2nd Edition
ISBN:9781305627734
Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Chapter2: Descriptive Statistics
Section: Chapter Questions
Problem 3P: Ohio Logistics manages the logistical activities for firms by matching companies that need products...
Related questions
Question
Do not answer in image format.
Maintain accuracy and quality in your answer.
Answer completely.
Transcribed Image Text:Watko Entertainment Systems (WES) buys audio and video components for assembling home entertainment systems from
two suppliers, Bacon Electronics and Hessel Audio and Video. The components are delivered in cartons. If the cartons are
delivered late, the installation for the customer is delayed. Delayed installations lead to contractual penalties that call for
WES to reimburse a portion of the purchase price to the customer.
During the past quarter, the purchasing and delivery data for the two suppliers showed the following:
Total purchases (cartons)
Average purchase price (per carton)
Number of deliveries
Percentage of cartons delivered late.
Bacon
Hessel
Bacon
5,000
$184
40
30%
Effective Cost
Per Carton
Hessel
3,000
$200
20
15%
The Accounting Department recorded $257,400 as the cost of late deliveries to customers.
Total
8,000
$ 190
60
25%
Required:
Assume that the average quality, measured by the percentage of late deliveries, and prices from the two companies will continue as in
the past. Also assume that the number of components is the same for all deliveries from either company. What is the effective price for
cartons from the two companies when late deliveries are considered?
Note: Do not round intermediate calculations. Round your answers to 2 decimal places.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
Recommended textbooks for you
Essentials of Business Analytics (MindTap Course …
Statistics
ISBN:
9781305627734
Author:
Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Publisher:
Cengage Learning
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Essentials of Business Analytics (MindTap Course …
Statistics
ISBN:
9781305627734
Author:
Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Publisher:
Cengage Learning
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub