Warranty Costs Brigham Company sells an electric timer that carries a 60-day unconditional warranty against product failure. Based on a reliable statistical analysis, Brigham knows that between the sale and the end of the product warranty period, three percent of the units sold will require repair at an average cost of $88 per unit. The following data reflect Brigham's recent experience: Dec. 31 October November December Total Units sold 18,000 17,000 22,500 57,500 Known product failures from sales in: October 160 275 105 540 November 115 180 295 December 205 205 Calculate the estimated liability for product warranties at December 31. $ (Assume that warranty costs of known failures have already been reflected in the records.)

Warranty Costs Brigham Company sells an electric timer that carries a 60-day unconditional warranty against product failure. Based on a reliable statistical analysis, Brigham knows that between the sale and the end of the product warranty period, three percent of the units sold will require repair at an average cost of $88 per unit. The following data reflect Brigham's recent experience: Dec. 31 October November December Total Units sold 18,000 17,000 22,500 57,500 Known product failures from sales in: October 160 275 105 540 November 115 180 295 December 205 205 Calculate the estimated liability for product warranties at December 31. $ (Assume that warranty costs of known failures have already been reflected in the records.)

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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Brigham Company sells an electric timer that carries a 60-day unconditional warranty against product failure. Based on a reliable statistical analysis, Brigham knows that between the sale and the end of the product warranty period, three percent of the units sold will require repair at an average cost of $35 per unit. The following data reflect Brigham's recent experience: Units sold Known product failures from sales in: October November December October November December Dec. 31 Total 36,000 34,000 45,000 115,000 320 550 230 210 360 410 1,080 590 410 Calculate the estimated liability for product warranties at December 31. $ 168,510 x (Assume that warranty costs of known failures have already been reflected in the records.)
Warranty Costs Brigham Company sells an electric timer that carries a 60-day unconditional warranty against product failure. Based on a reliable statistical analysis, Brigham knows that between the sale and the end of the product warranty period, three percent of the units sold will require repair at an average cost of $105 per unit. The following data reflect Brigham's recent experience: Units sold Known product failures from sales in: October November December October November December Dec. 31 Total 54,000 51,000 67,500 172,500 480 825 345 315 540 615 1,620 885 615 Calculate the estimated liability for product warranties at December 31. $ (Assume that warranty costs of known failures have already been reflected in the records.)
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Modem Appliances, Inc. sells food processors for $150 with a 120-day warranty against defects. Past experience indicates that 5% of the processors will have some defect during the warranty period and that the necessary repairs and adjustments will cost $25 per defective unit. Sales for August are $225,000. What is the estimated liability for product warranties for units sold in August? Select one: a. $3,000 b. $1,800 C. $11,250 d. $1,875 e. None of the above
E10-7A Warranty Costs Milford Company sells a motor that carries a 3-month unconditional warranty against product failure. Based on a reliable statistical analysis, Milford knows that between the sale and the end of the product warranty period, three percent of the units sold will require repair at an average cost of $60 per unit. The following data reflect Milford’s recent experience: October November December Dec.31 Total Units sold 23,000 22,000 25,000 70,000 Known product failures from sales in: October 120 180 160 460 November 130…
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Excom sells radios and each unit carries a two-year replacement warranty. The cost of repair defects under the warranty is estimated at 5% of the sales price. During September, Excom sells 110 radios for $40 each. One radio is actually replaced during September. For what amount in September would Excom debit Product Warranty Expense? Оа. S40 Оb. $21 Oc. $220 Od. $2,310 Previous
Excom sells radios and each unit carries a two-year replacement warranty. The cost of repair defects under the warranty is estimated at 5% of the sales price. During September, Excom sells 155 radios for $50 each. One radio is actually replaced during September. For what amount in September would Excom debit Product Warranty Expense? a.$22 b.$388 c.$3,410 d.$50
4. Bonita.com sells 6800 units of its product for $460 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 $40 per unit. In the year of sale, warranty contracts are honored on 120 units for a total cost of $4800. What amount should Bonita.com accrue on December 31 for estimated warranty costs? Select answer from the options below a. $8160 b. $32640 c. $ 4800 d. $3360
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
.11 Mobiles Co sells goods with a one year warranty under which customers are covered for any defect that /becomes apparent within a year of purchase. In calendar year 20X4, Mobiles Co sold 100,000 units. The company expects warranty claims for 5% of units sold. Half of these claims will be for a major defect, with an average claim value of $50. The other half of these claims will be for a minor defect, defect, with an average claim value of $50. The other half of these claims will be for a minor delee, with an average claim value of $10. What amount should Mobiles Co include as a provision in the statement of financial position for the year ended 31 December 20X4? $125,000 $ 25,000 $300,000 D $150,000 A C
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