Question

In 2012, Quapau Products introduced a new line of hot water heaters that carry a one-year warranty against manufacturer’s defects. Based on industry experience, warranty costs were expected to approximate 5% of sales revenue. First-year sales of the heaters were $300,000. An evaluation of the company’s claims experience in late 2013 indicated that actual claims were less than expected—4% of sales rather than 5%. Assuming sales of the heaters in 2013 were $350,000 and warranty expenditures in 2013 totaled $12,000, what is the 2013 warranty expense?



$1.99
Sales2
Views396
Comments0
  • CreatedDecember 23, 2013
  • Files Included
Post your question
5000