Required information [The following information applies to the questions displayed below.] BookWeb, Incorporated, sells books and software over the Internet. A recent article in a trade journal has caught the attention of management because the company has experienced soaring inventory handling costs. The article notes that similar firms have purchasing, warehousing, and distribution costs that average 13 percent of sales. Thirteen percent is attractive to BookWeb management when compared to its results for the past year, shown in the following table: Activity (cost) Cost Driver % of Cost Driver % of Cost Driver Incoming receipts ($300,000) Warehousing ($360,000) Shipments ($225,000) Cost Driver Number of purchase orders Number of inventory moves Number of shipments Quantity for Books for Software 2,000 9,000 70% 80% 30% 20% 15,000 25% 75% Book sales revenue totaled $3,900,000 and software sales revenue totaled $2,600,000. A review of the company's activities found various inefficiencies with respect to the warehousing of books and the outgoing shipments of software. In particular, book misplacements resulted in an extra 550 moves and software had 250 incorrect shipments. d-1. What is the cost percentage of sales for each both Books and Software line? d-2. In case of elimination of non-value-added activities, identify the correct statement. Complete this question by entering your answers in the tabs below. Req D1 Req D2 What is the cost percentage of sales for each both Books and Software line? Note: Round your answers to 2 decimal places. Books Software line Cost Percentage of Sales % %
Required information [The following information applies to the questions displayed below.] BookWeb, Incorporated, sells books and software over the Internet. A recent article in a trade journal has caught the attention of management because the company has experienced soaring inventory handling costs. The article notes that similar firms have purchasing, warehousing, and distribution costs that average 13 percent of sales. Thirteen percent is attractive to BookWeb management when compared to its results for the past year, shown in the following table: Activity (cost) Cost Driver % of Cost Driver % of Cost Driver Incoming receipts ($300,000) Warehousing ($360,000) Shipments ($225,000) Cost Driver Number of purchase orders Number of inventory moves Number of shipments Quantity for Books for Software 2,000 9,000 70% 80% 30% 20% 15,000 25% 75% Book sales revenue totaled $3,900,000 and software sales revenue totaled $2,600,000. A review of the company's activities found various inefficiencies with respect to the warehousing of books and the outgoing shipments of software. In particular, book misplacements resulted in an extra 550 moves and software had 250 incorrect shipments. d-1. What is the cost percentage of sales for each both Books and Software line? d-2. In case of elimination of non-value-added activities, identify the correct statement. Complete this question by entering your answers in the tabs below. Req D1 Req D2 What is the cost percentage of sales for each both Books and Software line? Note: Round your answers to 2 decimal places. Books Software line Cost Percentage of Sales % %
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
![Required information
[The following information applies to the questions displayed below.]
BookWeb, Incorporated, sells books and software over the Internet. A recent article in a trade journal has caught the
attention of management because the company has experienced soaring inventory handling costs. The article notes that
similar firms have purchasing, warehousing, and distribution costs that average 13 percent of sales. Thirteen percent is
attractive to BookWeb management when compared to its results for the past year, shown in the following table:
Activity (cost)
Cost Driver
Cost Driver % of Cost Driver % of Cost Driver
Quantity
Incoming receipts ($300,000)
Warehousing ($360,000)
Shipments ($225,000)
Number of purchase orders
Number of inventory moves
Number of shipments
2,000
9,000
for Books
70%
80%
for Software
30%
20%
15,000
25%
75%
Book sales revenue totaled $3,900,000 and software sales revenue totaled $2,600,000. A review of the company's
activities found various inefficiencies with respect to the warehousing of books and the outgoing shipments of software. In
particular, book misplacements resulted in an extra 550 moves and software had 250 incorrect shipments.
d-1. What is the cost percentage of sales for each both Books and Software line?
d-2. In case of elimination of non-value-added activities, identify the correct statement.
Complete this question by entering your answers in the tabs below.
Req D1
Req D2
What is the cost percentage of sales for each both Books and Software line?
Note: Round your answers to 2 decimal places.
Books
Software line
Cost Percentage
of Sales
%
%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff92aa681-6469-4023-a268-c782bf24fd49%2F64dd8663-0588-4cda-9090-c4011f65a3d8%2F7rakleo_processed.png&w=3840&q=75)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
BookWeb, Incorporated, sells books and software over the Internet. A recent article in a trade journal has caught the
attention of management because the company has experienced soaring inventory handling costs. The article notes that
similar firms have purchasing, warehousing, and distribution costs that average 13 percent of sales. Thirteen percent is
attractive to BookWeb management when compared to its results for the past year, shown in the following table:
Activity (cost)
Cost Driver
Cost Driver % of Cost Driver % of Cost Driver
Quantity
Incoming receipts ($300,000)
Warehousing ($360,000)
Shipments ($225,000)
Number of purchase orders
Number of inventory moves
Number of shipments
2,000
9,000
for Books
70%
80%
for Software
30%
20%
15,000
25%
75%
Book sales revenue totaled $3,900,000 and software sales revenue totaled $2,600,000. A review of the company's
activities found various inefficiencies with respect to the warehousing of books and the outgoing shipments of software. In
particular, book misplacements resulted in an extra 550 moves and software had 250 incorrect shipments.
d-1. What is the cost percentage of sales for each both Books and Software line?
d-2. In case of elimination of non-value-added activities, identify the correct statement.
Complete this question by entering your answers in the tabs below.
Req D1
Req D2
What is the cost percentage of sales for each both Books and Software line?
Note: Round your answers to 2 decimal places.
Books
Software line
Cost Percentage
of Sales
%
%
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