Question
A company sells computers for $2,000 each. Each computer has a two-year warranty that covers replacement of defective parts. It is estimated that 2% of
A company sells computers for $2,000 each. Each computer has a two-year warranty that covers replacement of defective parts. It is estimated that 2% of all computers sold will be returned under the warranty with an average cost of $154 each. During November, the company sold 32,000 computers;. 420 computers were serviced under the warranty during November at a total cost of $57,000. The balance in the Estimated Warranty Liability account at November 1 was $30,000. What is the company's warranty expense for the month of November? |
A) $98,560
B) $27,000
C) $49,280
D) $64,680
E) $57,000
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