I need help with accounting question Alpine Electronics Inc. was established to sell a single product that carries a90-day warranty against defects. Engineering estimates indicate that 4% ofthe units sold will prove defective and require an average repair cost of $55per unit. During Alpine's first quarter of operations, total sales were 750units; by the end of the quarter, 11 defective units had been repaired. Theliability for product warranties at quarter-end should be:a. $825b. $1,320c. $1,650d. $1,485e. none of these

Step 1: Definition of Product Warranty LiabilityProduct warranty liability refers to the estimated…

Answered: Alpine Electronics Inc. was established…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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OptixPro Gear Inc. was organized to sell a single product that carries a 90-day warranty against defects. Engineering estimates indicate that 4% of the units sold will prove defective and require an average repair cost of $50 per unit. During OptixPro’s first month of operations, total sales were 500 units; by the end of the month, 4 defective units had been repaired. The liability for product warranties at month-end should be___. a. $650 b. $800 c. $950 d. $1,000 e. none of these HELP
outback Co. was organized to sell a single product that carries a 45 day warranty against defects. Engineering estimates indicates that 12% of the units sold will prove defective and require an average repair cost of $20 per unti. During outbacks first month of operations, total sales were 200 untis; by the end of the month, nine defective units had been repaired. The Liability for product warrantees at month end should be. a.$180 b.$660 c.$300 d.$480
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final answer is accounting
Video-Technical, Inc. was organized to sell a single product for $600 per unit, including a 60-day warranty against defects. Engineering estimates indicate that 5% of the units sold will prove defective and require an average repair cost of $50 per unit. During September, total sales were $198,000; 9 units sold during September were found defective and repaired. The accrued liability for product warranties at month-end should be: Select one: a. $ 850 b. $ 400 c. $ 450 d. $1,150 e. None of the above
answer should be $___.
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The goal of Video-Technical, Inc.'s formation was to offer a single product for $600 each with a 60-day warranty against flaws. According to engineering estimations, 5% of the units that are sold will turn out to be faulty and need an average $50 in repairs. $198,000 in sales were made overall in September, although 9 of the devices were later determined to be faulty and had to be fixed. At the conclusion of the month, the accumulated obligation for product guarantees should be: A. $ 850 B. $ 400 C. $ 450 D. $1,150 E. None of the above
3. Jansen Company sells a product for $400 per unit, which includes a 30-day warranty against product defects. Experience indicates that four percent of the units sold will prove defective, requiring an average repair cost of $50 per unit. During the first month of business, product sales were $320,000, and 20 of the units sold were found to be defective and repaired during the month. What is the accrued liability for product warranties at month-end? a $1,000 b. $600 c. $1,600 d. $2,000
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Hollingsworth Industries introduced a new line of ceiling fans in 20x1 that carry a two-year warranty against manufacturer's defects. Management estimated that warranty costs were expected to approximate 6% of sales revenue. First-year sales of the fans were $370,000. An evaluation of the company's claims experience in late 20x2 indicated that actual claims were less than expected-5% of sales rather than 6%. Sales of the fans were $420,000 in 20x2. What is the 20x2 warranty expense? Warranty expense
Hopewell sells a line of goods under a six-month warranty. Any defect arising during that period is repaired free of charge. Hopewell has calculated that if all the goods sold in the last six months of the year required repairs the cost would be $2 million. If all of these goods had more serious faults and had to be replaced the cost would be $6 million. The normal pattern is that 80% of goods sold will be fault-free, 15% will require repairs and 5% will have to be replaced. What is the amount of the provision required?

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