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At the beginning of 2018, Angel Corporation began offering a two-year warranty on its products. The warranty program was expected to cost Angel 9% of
At the beginning of 2018, Angel Corporation began offering a two-year warranty on its products. The warranty program was expected to cost Angel 9% of net sales. Net sales made under warranty in 2018 were $208 million. Fifteen percent of the units sold were returned in 2018 and repaired or replaced at a cost of $5.00 million. The amount of warranty expense on Angel's 2018 income statement is:
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$31.20 million.
$5.00 million.
$22.12 million.
$18.72 million.
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