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Elan Coil [88]
3 years ago
7

A company estimates that warranty expense will be 4% of sales. The company's sales for the current period are $185,000. The curr

ent period's entry to record the warranty expense is:
Business
1 answer:
jasenka [17]3 years ago
4 0

Answer:

Dr Warranty Expense 7,400

Cr Estimated Warranty Liability 7,400

Explanation:

Based on the information given we were told that the company estimated that the warranty expense will be 4% of sales in which the sales for the current period was the amount of $185,000. Therefore the current period's Journal entry to record the warranty expense is:

Dr Warranty Expense 7,400

Cr Estimated Warranty Liability 7,400

(185,000 x 0.04 = 7,400)

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Hope this helps.

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A recurring theme in economics is that people:
Leni [432]

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D. Have unlimited economic wants, but limited resources

Explanation:

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Mayfield Company sells two​ products, Blue models and Plaid models. Blue models sell for per unit with variable costs of per uni
mario62 [17]

Answer:

B. 980 units

Explanation:

Note: This question is not complete. The full question is therefore presented before answering the question as follows:

Mayfield Company sells two products, Blue models and Plaid models. Blue models sell for $40 per unit with variable costs of $20 per unit. Plaid models sell for $54 per unit with variable costs of $25 per unit. Total fixed costs for the company are $24,500. Mayfield Company typically sells four Blue models for every four Plaid models. What is the breakeven point in total units? (Round any intermediary calculations to the nearest whole number).

A. 211 units

B. 980 units

C. 125 units

D. 3,063 units

The explanation of the answer is now given as follows:

Note: See the attached excel file for the calculation of the total contribution margin and total sales mix.

From the excel file, we have:

Total contribution margin = $196

Total sales mix = $8

We can now calculate weighted contribution margin as follows:

Weighted contribution margin = Total contribution margin / Total sales mix = $196 / 8 = $24.5, or $25 rounded to the nearest whole number

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Breakeven point in total units = Total fixed costs / Weighted contribution margin = $24,500 / $25 = 980 units

Therefore, the option is <u>B. 980 units</u>.

Download xlsx
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