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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:

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.

e$-1.$ Do either of the product lines require additional cost cutting to achieve the target percentages?

e$-2.$ How much additional cost cutting is needed to achieve the target percentages?

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Req E$2$

How much additional cost cutting is needed to achieve the target percentages?

Additional cost cutting