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Cloudrain Co gives a one-year warranty with all products and the rate of returns under warranty is 12%.5% of the returned items can be repaired
Cloudrain Co gives a one-year warranty with all products and the rate of returns under warranty is 12%.5% of the returned items can be repaired at a cost of 5 (free of charge to the customer). The other 95% are scrapped and a full refund of 30 is given. Cloudrain Co sold 525,000 units during the year to 31 December 2020. What is the amount of the warranty provision that should be created at 31 December 2020? 1,890,000 1,811,250 O 1,795,500 O 1,575,000
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