A company sells computers at a selling price of $1,400 each. Each computer has a
ID: 2506241 • Letter: A
Question
A company sells computers at a selling price of $1,400 each. Each computer has a 2 year warranty that covers replacement of defective parts. It is estimated that 2% of all computers sold will be returned under the warranty at an average cost of $142 each. During November, the company sold 22,000 computers, and 320 computers were serviced under the warranty at a total cost of $45,000. The balance in the Estimated Warranty Liability account at November 1 was $25,000. What is the company's warranty expense for the month of November?
$45,000 $20,000 $62,480 $45,440 $31,240Explanation / Answer
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