QUESTION 11 Lovely Company offers a 2-year warranty on its product and as of 1/1/2018 Lovely's warranty liability had an overall balance of $415. During 2018 Lovely sold 1,600 units of inventory at a selling price of $125 per unit and repaired 62 units under warranty at a total repair cost to Lovely of $740. When accounting for warranty cost. Lovely studies prior year customer claims as well as projected labor and material costs and for 2018. Lovely estimated that 4% of the units sold in 2018 would break over the 2-year warranty period at an estimated repair cost of $12.50 per unit. What amount should Lovely report at 12/31/2018 as warranty liability? None of the answer choices shown are correct. $475 $800 O $740 O $355