Current Attempt in Progress Sheridan.com sells 6700 units of its product for $490 each. The selling price includes a one-year warranty on parts. It is expected that 3% of the units will be defective and that repair costs will average $60 per unit. In the year of sale, warranty contracts are honored on 140 units for a total cost of $8400. What amount should Sheridan.com accrue on December 31 for estimated warranty costs? $8400 O $72360 O $3660 O $12060

Current Attempt in Progress Sheridan.com sells 6700 units of its product for $490 each. The selling price includes a one-year warranty on parts. It is expected that 3% of the units will be defective and that repair costs will average $60 per unit. In the year of sale, warranty contracts are honored on 140 units for a total cost of $8400. What amount should Sheridan.com accrue on December 31 for estimated warranty costs? $8400 O $72360 O $3660 O $12060

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter12: Current Liabilities

Section: Chapter Questions

Problem 9MC: Blake Department Store sells television sets with one-year warranties that cover repair and...

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Question

Current Attempt in Progress
Sheridan.com sells 6700 units of its product for $490 each. The selling price includes a
one-year warranty on parts. It is expected that 3% of the units will be defective and
that repair costs will average $60 per unit. In the year of sale, warranty contracts are
honored on 140 units for a total cost of $8400. What amount should Sheridan.com
accrue on December 31 for estimated warranty costs?
$8400
O $72360
O $3660
O $12060

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