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28 October, 10:22

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 132 radios for $54 each. One radio is actually replaced during September. For what amount in September would Excom debit Product Warranty Expense?

A. $4,088

B. $28

C. $49

D. $358

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Answers (1)
  1. 28 October, 13:00
    0
    D. $358

    Explanation:

    The computation of the Product Warranty Expense is shown below:

    = Number of radios sold * selling price per radios * estimated warranty percentage

    = 132 radios * $54 * 5%

    = $356.40

    i. e $358 approx

    By multiplying the number of radios sold with the selling price and the estimated warranty percentage we can get the product warranty expense 58
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Home » Business » 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 132 radios for $54 each.
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