Jim Muir is a sales manager for an automobile dealership. He earns a bonus each year based on revenue from the number of autos solid in the year less related warranty expenses. Actual warranty expenses have varied over the prior 10 years from a low of 3% of an automobiles selling price to a high of 10%. In the past, Bly has tended to estimate warranty expenses on the high end to be conservative. He must work with the dealerships accountant at year-end to arrive at the warranty expense accrual for cars sold each year. 1. Does the warranty accrual decision create any ethical dilemma for Jim Muir? Please explain. 2. Because warranty expenses vary, what percent do you think Jim Muir should choose for the current year? Justify your response.