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Tata Motor Company manufactures and sells automobiles, and as part of the purchase price of the car, Tata provides for a manufacturer's assurance warranty for

Tata Motor Company manufactures and sells automobiles, and as part of the purchase price of the car, Tata provides for a manufacturer's assurance warranty for 3 years that covers only the cost of parts needed for any warranty repair. It is estimated that each car will incur parts costs of $600 over the 3-year warranty period. In addition, Tata offers a 3-year extended warranty (that runs concurrently with the manufacturer's assurance warranty) that covers the cost of labor for any needed repairs. This extended warranty is priced at $1200. Tata estimates that labor costs over the three-year warranty period will total $900 per automobile In 2023, its first year of operation, Tata Motor Company sold 10,000 automobiles at a price of $20,000 each. All customers purchased an extended warranty. Assume all sales occur on January 1.
In 2023, Tata's warranty costs were as follows: $2,200,000 for parts, and $3,800,000 for labor.
What is the revenue amount recognized on the extended warranty and what is the expense amount recognized for warranty labor in 2023?(3 pts)
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