Question: Answer with full solution Question 9 Cameron Company sells 2,000 units of its product for $500 each in 2017. The selling price includes a one-year

Answer with full solution

Question 9 Cameron Company sells 2,000 units of its product for $500 each in 2017. 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 $100 per unit. In 2017, warranty contracts are honoured on 40 units for a total cost of $4,000. What amount should Cameron Company accrue on December 31, 2017 for estimated warranty expense? $6,000 $4,000 $2,000 O $30,000

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