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Excom manufactures high-end whole home electronic systems. The company provides a two-year warranty for all products sold. The company estimates that the warranty costs related
Excom manufactures high-end whole home electronic systems. The company provides a two-year warranty for all products sold. The company estimates that the warranty costs related to dollar sales are 2% for the first year of warranty and 5% for the second year of warranty. Sales and actual warranty expenditures for 2018 and 2019 are presented below: 2018 2019 Sales $600,000 $800,000 Actual Warranty Exp 30,000 40,000 What is the estimated warranty liability at the end of 2019? $16,000 $28,000 $38,000 $58,000
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