QUESTION 4 Techno Smart was organized to sell a single product for $2,400 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 $200 per unit. During the first month of operations, total sales were $768,000. Nine units sold in the first month were found defective and repaired that month. The accrued liability for product warranties at month-end should be: A. $3,200 B. $1,800 OC. $4,600 D. $1,400

QUESTION 4 Techno Smart was organized to sell a single product for $2,400 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 $200 per unit. During the first month of operations, total sales were $768,000. Nine units sold in the first month were found defective and repaired that month. The accrued liability for product warranties at month-end should be: A. $3,200 B. $1,800 OC. $4,600 D. $1,400

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter15: Managing Short-term Assets

Section: Chapter Questions

Problem 9PROB

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