Solution-Calculate the warranty expense for each year

Calculate the warranty expense for each year

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Reference no: EM132565499

Question - On January 1, 2015, Cullumber Company began a warranty program to stimulate sales. It is estimated that 5% of the units sold will be returned for repair at an estimated cost of $39 per unit. Sales and warranty figures for the three years ended December 31 are as follows:

	2015	2016	2017
Sales (units)	1,300	1,600	1,900
Sales price per unit	$190	$120	$125
Units returned for repair under warranty	75	90	105
Actual warranty costs	$2,535	$2,930	$3,635

Required - Calculate the warranty expense for each year and warranty liability at the end of each year.

Reference no: EM132565499

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Calculate the warranty expense for each year

Reference no: EM132565499

Reference no: EM132565499

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