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Sony Company sells plasma television sets with a two-year warranty and estimated warranty costs as percentage of peso sales as follows: first year of warranty
Sony Company sells plasma television sets with a two-year warranty and estimated warranty costs as percentage of peso sales as follows: first year of warranty - 5%; second year of warranty - 8%. The company recorded sales of P4,000,000 and P7,000,000 in 2019 and 2020, respectively and incurred actual repair costs of P150,000 and P400,000 in 2019 and 2020, respectively Assume that sales and repairs occur evenly throughout each year. How much repair cost relating to 2019 and 2020 sales are expected to be incurred after 2020?
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