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Lulzbot.com sells 6,000 units of its product for $500 each. The sales price includes a one-year warranty on parts. 3% of units are expected to
Lulzbot.com sells 6,000 units of its product for $500 each. The sales price includes a one-year warranty on parts. 3% of units are expected to be defective and repair costs are expected to average $50 per unit. In the year of sale, warranty contracts are fulfilled on 120 units for a total cost of $6,000.
How much should Lulzbot.com accrue on December 31 for estimated warranty costs?
How much should Lulzbot.com accrue on December 31 for estimated warranty costs?
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Intermediate Accounting
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Nicola M. Young, Irene M. Wiecek, Bruce J. McConomy
11th Canadian edition Volume 2
1119048540, 978-1119048541
