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snow_lady [41]
3 years ago
5

A company has a selling price of $1,300 each for its printers. Each printer has a 2 year warranty that covers replacement of def

ective parts. It is estimated that 2% of all printers sold will be returned under the warranty at an average cost of $140 each. During November, the company sold 20,000 printers, and 300 printers were serviced under the warranty at a total cost of $40,000. The balance in the Estimated Warranty Liability account at November 1 was $24,000. What is the company's warranty expense for the month of November?
Business
1 answer:
riadik2000 [5.3K]3 years ago
3 0

Answer:

$56,000

Explanation:

The computation of the warranty expense for the month of November is shown below:

Warranty expense = Number of printers × Estimated percentage of defectives parts × Average cost per printer

= 20,000 printers × 2% × $140

= 400 × 1460

= $56,000

We simply multiplied the number of printers with the estimated percentage and the average printer cost so that the warranty expense could come

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