E10.9 (LO 2) Ting Manufacturing sells its products with a 75-day warranty for defective merchandise.Based on past experience, Ting estimates that 3% of the units sold will become defective during thewarranty period. Management estimates that the average cost of replacing or repairing a defective unitRecord estimated liabiliry andexpense for warrunnies is NT$15 (amounts in thousands). The units sold and units defective that occurred during the last 2months of 2020 are as follows.UnitsUnits DefectiveMonthSoldPrior to December 31November30,000600December32,000400Instructionsa. Prepare the journal entries to record the provision for warranties and the costs incurred in honoring1,000 warranty claims. (Assume actual costs of NT$15,000.)b. Determine the estimated warranty liability at December 31 for the units sold in November andDecember.c. Give the entry to record the honoring of 500 warranty contracts in January at an average cost ofNT$15.

Warranty Expense -:Warranty expenditure is the expense that a business foresees or costs that has…

E10.9 (LO 2) Ting Manufacturing sells its products with a 75-day warranty for defective merchandise. Based on past experience, Ting estimates that 3% of the units sold will become defective during the varranty period. Management estimates that the average cost of replacing or repairing a defective unit

E10.9 (LO 2) Ting Manufacturing sells its products with a 75-day warranty for defective merchandise. Based on past experience, Ting estimates that 3% of the units sold will become defective during the varranty period. Management estimates that the average cost of replacing or repairing a defective unit

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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3. 3.Each year, 20/20 Vision Clinic sells 10,000 frames for eyeglasses. The clinic orders frames from a regional supplier, which charges $25 per frame. Each order incurs an ordering cost of $60. 20/20 vision believes that the demand for frames can be backlogged and that the cost of being short one frame for one year is $15 (because of loss of future business). The annual holding cost for inventory is 20% of the dollar value of each frame. A. Find the optimal order quantity B. Find the maximum shortage and maximum inventory level.
Boost inc sells vitamin supplements to customers with an unconditional sales return if they are not satisfied. The sales return extends 90 days. On May 12, 2023, High Country Integrated health purchases $4,000 of products with a cost of $2,000. Based on the company's prior experience, estimated returns are 20%. The journal entry to record the expected sales return and cost of goods sold includes a
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6. SPIDER MAN Bottling Corporation embarked on a promotional program whereby a can opener costing P13 each is given away for 10 bottle crowns plus P5. SPIDER MAN also pays P2 per can opener for handling and shipping cost. SPIDER MAN estimates that only 40% of the bottle crowns in the hands of consumers will be presented for redemption. The following information is available: Bottles sold - 1,000,000 units amounting to P5,000,000; Can openers bought for giveaways - 15,000 units amounting to P195,000; Can openers distributed to customers - 10,0o00 units. At the close of the first year, how much should SPIDER MAN recognize as estimated liability for promotional items outstanding? *
Q5. (Dersyn Corporation produces and sells two models of vacuum cleaners, Standard and Deluxe. The company records show the following monthly data relating to these two products: standard deluxe Selling price per unit $150 $165 variable production costs $120 $126 variable selling expense per unit $16 $13 expected monthly sales in units 600 1200 total monthly fixed cost (common to both) $15,000 Calculate the break-even in sales dollars for the expected sales mix. Show all your calculations.
Balboa Enterprises currently sells 13,650 units a month for total monthly sales of $272,863.50. The company is considering replacing its current cash only credit policy with a net 30 policy. The variable cost per unit is $11.30 and the monthly interest rate is 1 percent. What is the switch break-even level of sales? 13,492 units 13,525 units 13,600 units 13,968 units 14,069 units
Echo-Echo Ltd sells robots under warranty. Past experience has taught thecompany’s accountant that: 95% of the robots will have no defects. 3% of the robots will have minor defects. 2% of the robots will have major defects.If all robots sold had minor defects, the cost of repair would be £1,800,000.If all robots sold had major defects, the cost of replacement would be £2,500,000.What would be the value of the provision for warranties based on theexpected value?
4- A manufacturer currently prices its product at 10 TL per unit. Last year, the manufacturer sold 60.000 units. The variable cost per unit is 6 TL. Total fixed costs are 120.00O TL. The manufacturer intends to increase sales by 5%. Current accounts receivable collection period is 30 days. If the manufacturer wants to relax its credit standards, the expectation is that bad debt expenses will increase from 1% of sales to 2% of sales. The opportunity cost of investing in accounts receivables is 15%. In order to benefit from relaxing its credit standards, what would be the expected maximum accounts receivable collection period? (Assume that existing customers are not expected to alter their payment habits. 1 year = 365 days) 82,38 days 63,33 days 105,82 days O 63,73 days
(c) Jack's Auto manufactures clectric compact cars at $15,000 per unit. The company sells the cars at a price of $45,000 per unit. The fixed cost per month for the company is S120,000. Find the breakeven quantity and revenue.
The following information is given to you about a manufacturing business: The days sale of inventory, DSI - 44 days The days sale outstanding. DSO = 38 days The days payables outstanding. DPO = 53 days The markup policy aplies 20% on cost to determine the sale price of a piece of inventory. All sales are credit sales; vendors also supply on credit basis. The operating capital is borrowed at an interest rate of 37% and the annual days of operations is 346. (1) The cash conversion cycle, CCC - (2) The annual rate of return on capital AFTER interest is days (Round TWO places of decimal) % (Round TWO places of decimal)
(Whether to explore or not the foreign market). A company annually manufactures 10,000 units of a product at a cost of $ 4 per unit and there is home market for consuming the entire volume of production at the sale price of $ 4.25 per unit. In the year 2019, there is a fall in the demand for home market which can consume 10,000 units only at a sale price of $ 3.72 per unit. The analysis of the cost per 10,000 units i : $ $ Material 15,000 Fixed overheads 8,000 Wages 11,000 Variable overheads 6,000 The foreign market is explored and it is found that this market can consume 20,000 units of the product if offered at a sale price of $ 3.55 per unit. It is also discovered that for additional 1000 units of the product (over initial 10,000 units) the fixed overheads will increase by 10%. Is it worthwhile to try to capture the foreign market ?