Requlred Information

Exercise $10-38$ & $10-39($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 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:

The Accounting Department recorded $$273,000$ as the cost of late deliveries to customers.

Exerclse $10-39($Algo$)$ Actlvity$-$Based Costing of Suppllers $($LO $10-3,4)$

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.

Requlred:

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 Intermedlate colculatlons. Enter your answer as a percentege rounded to $2$ declmol pleces $($l$.$e$.,\mathrm{.}3212$ as

$32\mathrm{.}12).$