Nikul Required InformationExercise 10-38 & 10-39 (Algo) (LO 10-3, 4)[The following information applies to the questions displayed below.]Watko Entertainment Systems (WES) buys audio and video components for assembling home entertainment systems fromtwo suppliers, Bacon Electronics and Hessel Audio and Video. The components are delivered in cartons. If the cartons aredelivered late, the installation for the customer is delayed. Delayed installations lead to contractual penalties that call forWES 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 deliveriesPercentage of cartons delivered late.Bacon5,000$ 2004030%BaconHesselHessel3,000$ 2162015%Effective CostPer CartonTotal8,000$ 206The Accounting Department recorded $273.000 as the cost of late deliveries to customers.Exercise 10-38 (Algo) Activity-Based Costing of Suppliers (LO 10-3, 4)6025%Required:Assume that the average quality, measured by the percentage of late deliveries, and prices from the two companies will continue as inthe past. Also assume that the number of components is the same for all deliveries from either company. What is the effective price forcartons from the two companies when late deliveries are considered?Note: Do not round Intermediate calculations. Round your answers to 2 decimal places.

Activity-Based Costing (ABC) is a costing methodology that assigns overhead costs to specific…

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: