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Company A provides a one-year warranty to its clients for HDD cameras. An analysis of Claims department, based on past experience, shows that 85% of

Company "A" provides a one-year warranty to its clients for HDD cameras. An analysis of "Claims" department, based on past experience, shows that 85% of the products are not subject to warranty claims. In addition, approximately 10% of the cameras sold have minor defects and another 5% require major repairs or replacement.The average sales price of an HHD camera is USD 700.For 2020, the Company has generated the following sales and the "Controlling" department has provided the following estimate for the removal of defects in the warranty claims:

Number USD
Sales (number) 15,000
Average cost of repair per number, of which
Major repair 600
Minor defects 80

What is the size of the provision for warranties as at 31 December 2020?

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