Question

g Hall Company sells merchandise with a one-year warranty. In the current year, sales consisted of 4,211 units. It is estimated that warranty repairs will average $12 per unit sold, and 30% of the repairs will be made in the current year and 70% in the next year. In the current year's income statement, Hall should show warranty expense of

Answer 1

The warranty expense is $50,532

Step-by-step explanation:

the computation of the warranty expense is as follows;

= Warranty repairs per unit × Unit sales

= $12 × 4,211 units

= $50,532

By multiplying the warranty repairs per unit with the unit sales we can calculate the warranty expense

hence, the warranty expense is $50,532