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Q5 An entity sells 1,000 units of a product with warranties under which the entity will repair any manufacturing defects that become apparent within the
Q5 An entity sells 1,000 units of a product with warranties under which the entity will repair any manufacturing defects that become apparent within the first six months after purchase. If a minor defect is detected in a product, estimated repair costs of Rs. 100 will result. If a major defect is detected in a product, estimated repair costs of Rs. 400 will result. The entity's experience together with its future expectations indicate that 75 per cent of the goods sold have no defects, 20 per cent of the goods sold have minor defects and 5 per cent of the goods sold have major defects
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