Rainbow Company sells products that are subject to a 1-year warranty. During 2016, the company sold 70,000 units of its products, of which management believes that 5% of the units will be defective. The cost to repair each unit is $35. During the year, the company honored warranty contracts for 2,500 units. During January 2017, 200 units were repaired.

The warranty expense for the year 2016 is?

Rainbow Company sells products that are subject to a 1-year warranty. During 2016, the company sold 70,000 units of its products, of which management believes that 5% of the units will be defective. The cost to repair each unit is $35. During the year, the company honored warranty contracts for 2,500 units. During January 2017, 200 units were repaired.

The warranty expense for the year 2016 is?