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 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 $ 160 40 30% Hessel 3,000 $176 Total 8,000 $166 Total purchases (cartons) Average purchase price (per carton) Number of deliveries Percentage of cartons delivered late. The Accounting Department recorded $234,000 as the cost of late deliveries to customers. 20 154 60 25% 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 t same for all c liveries from other company Required: What percentage of late deliveries by Bacon would make WES indifferent between buying from Bacon Electronics and Hessel Audio and Note: Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (ie, 3212 as 32.12).
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 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 $ 160 40 30% Hessel 3,000 $176 Total 8,000 $166 Total purchases (cartons) Average purchase price (per carton) Number of deliveries Percentage of cartons delivered late. The Accounting Department recorded $234,000 as the cost of late deliveries to customers. 20 154 60 25% 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 t same for all c liveries from other company Required: What percentage of late deliveries by Bacon would make WES indifferent between buying from Bacon Electronics and Hessel Audio and Note: Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (ie, 3212 as 32.12).
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A1
![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 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 Hessel
5,000
3,000
$ 160
$ 176
20
154
Total
Total purchases (cartons)
8,000
Average purchase price (per carton)
Number of deliveries
$ 166
40
60
Percentage of cartons delivered late.
304
25%
The Accounting Department recorded $234,000 as the cost of late deliveries to customers.
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
Required:
What percentage of late deliveries by Bacon would make WES indifferent between buying from Bacon Electronics and Hessel Audio
and Video?
Note: Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (.e., .3212 as
32.12).
indiference pont](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F52e20bd8-8e18-4b4f-b424-87267eb0c0db%2F1cfeeab6-ef3c-4e60-8fc5-2400164c8e40%2F6f6yy1hh_processed.png&w=3840&q=75)
Transcribed Image Text: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 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 Hessel
5,000
3,000
$ 160
$ 176
20
154
Total
Total purchases (cartons)
8,000
Average purchase price (per carton)
Number of deliveries
$ 166
40
60
Percentage of cartons delivered late.
304
25%
The Accounting Department recorded $234,000 as the cost of late deliveries to customers.
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
Required:
What percentage of late deliveries by Bacon would make WES indifferent between buying from Bacon Electronics and Hessel Audio
and Video?
Note: Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (.e., .3212 as
32.12).
indiference pont
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