Required Information[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.BaconHesselAnswer is complete but not entirely correct.EffectiveCost PerCartonBacon5,000$ 1764030%SSHessel3,000$192The Accounting Department recorded $249,600 as the cost of late deliverles to customers.228.80220.80 x2015%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.Total8,000$1826025% 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 deliverles from either company.Required:What percentage of late deliverles by Bacon would make WES Indifferent between buying from Bacon Electronics and Hessel Audioand Video?Note: Do not round Intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (l.e., .3212 as32.12).Answer is complete but not entirely correct.Indifference point29.97%

The effective price of the carton will include the average purchase price per carton and the…

Answered: Watko Entertainment Systems (WES) buys…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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 $ 192 40 30% Bacon Hessel Hessel 3,000 $ 208 Total purchases (cartons) Average purchase price (per carton) Number of deliveries Percentage of cartons delivered late. The Accounting Department recorded $265,200 as the cost of late deliveries to customers. Effective Cost Per Carton Total 8,000 $ 198 20 15% Required: Assume that the average quality, measured by the percentage of late deliveries, and prices from the two companies will continue as in the…
The Cloth Bonanza sells fabrics to a wide range of industrial and consumer users. One of the products it carries is denim cloth, used in the manufacture of jeans and carrying bags. The supplier for the denim cloth pays all incoming freight. No incoming inspection of the denim is necessary because the supplier has a track record of delivering high-quality merchandise. The purchasing officer of the Cloth Banaza has collected the following information: Annual demand for denim cloth 29,250 yards Ordering cost per purchase order $195 Carrying cost per year 20% of purchase costs Safety-stock requirements None Cost of denim cloth $15 per yard The purchasing lead time is 2 weeks. The Cloth Banaza is open 250 days a year (50 weeks for 5 days a week). 1. Calculate the EOQ for denim cloth.…
! Required information [The following information applies to the questions displayed below.] Kinnear Plastics manufactures various components for the aircraft and marine industry. Kinnear buys plastic from two vendors: Tappan Corporation and Hill Enterprises. Kinnear chooses the vendor based on price. Once the plastic is received, it is inspected to ensure that it is suitable for production. Plastic that is deemed unsuitable is disposed of. The controller at Kinnear collected the following information on purchases for the past year: Total purchases (tons) Plastic discarded Tappan 5,000 200 The purchasing manager has just received bids on an order for 330 tons of plastic from both Tappan and Hill. Tappan bid $2,112 and Hill bid $2,109 per ton. Effective cost per ton Hill 7,500 375 Required: 1-a. Assume that the average quality, measured by the amounts discarded from the two companies, will continue as in the past. What is the effective cost per ton for both Tappan and Hill? (Do not…
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Suppose that Stillwater Designs has two classes of distributors: JIT distributors and non-JIT distributors. The JIT distributor places small, frequent orders, and the non-JIT distributor tends to place larger, less frequent orders. Both types of distributors are buying the same product. Stillwater Designs provides the following information about customer-related activities and costs for the most recent quarter: JITDistributors Non-JITDistributors Sales orders 1,000 100 Sales calls 70 70 Service calls 350 175 Average order size 650 6,500 Manufacturing cost/unit $125 $125 Customer costs: Processing sales orders $3,380,000 Selling goods 1,120,000 Servicing goods 1,050,000 Total $5,550,000 Required: 1. Calculate the total revenues per distributor category, and assign the customer costs to each distributor type by using revenues as the allocation base. Selling price for one unit is $150. Round calculations to the nearest dollar. JIT…
Hult Games buys electronic components for manufacturing from two suppliers, Milan Components and Dundee Parts. If the components are delivered late, the shipment to the customer is delayed. Delayed shipments lead to contractual penalties that call for Hult 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. Milan Dundee Total Total purchases (cartons) 98,000 42,000 140,000 Average purchase price (per carton) $ 20.00 $ 22 $ 20.60 Number of deliveries 80 20…

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