Warranty Costs Milford Company sells a motor that carries a 60-day unconditional warranty against product failure....

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Warranty Costs Milford Company sells a motor that carries a 60-day 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, two percent of the units sold will require repair at an average cost of $175 per unit. The following data reflect Milford's recent experience: Units sold Known product failures from sales in: October November December October November December Dec. 31 Total 46,000 44,000 50,000 140,000 240 360 260 320 440 420 920 700 420 Calculate the estimated liability for product warranties at December 31. $ 0 (Assume that warranty costs of known failures have already been reflected in the records.) Warranty Costs Milford Company sells a motor that carries a 60-day 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, two percent of the units sold will require repair at an average cost of $175 per unit. The following data reflect Milford's recent experience: Units sold Known product failures from sales in: October November December October November December Dec. 31 Total 46,000 44,000 50,000 140,000 240 360 260 320 440 420 920 700 420 Calculate the estimated liability for product warranties at December 31. $ 0 (Assume that warranty costs of known failures have already been reflected in the records.)

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