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A manufacturing company sells its main product with a three - year warranty against defects. The company expects that 6 % of the units sold
A manufacturing company sells its main product with a threeyear warranty against defects. The company expects that of the units sold will prove to be defective during the warranty period. Management expects warranty claims will be even over the threeyear warranty period. The average cost to repair or replace a defective unit under the warranty is expected to be $
The company's sales and warranty costs incurred in its first three years were as follows:
tableUnits Sold,tableActual Costs of Repairsand Replacements underthe Warranty Plan$
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