In 2015, Quapau Products introduced a new line of hot water heaters that carry a

Question

In 2015, Quapau Products introduced a new line of hot water heaters that carry a one-year warranty against manufacturer's defects. Based on industry experience, warranty costs were expected to approximate 6% of sales revenue. First-year sales of the heaters were $340,000. An evaluation of the company's claims experience in late 2016 indicated that actual claims were less than expected-5% of sales rather than 6%. Assuming sales of the heaters in 2016 were $390,000 and warranty expenditures in 2016 totaled $17,500 what is the 2016 warranty expense? Warranty expense

Explanation / Answer

Warranty expense = 390000*5%= 19500

Related Questions

Navigate

• Browse (All)
• Browse I
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.