You now move on to your next task - how to account for the cost of repairs or replacements on the footwear. As part of Jordan's public customer charter, it either offers a warranty that repairs the new ErgoMax footwear or replaces it if there are quality issues within six months of the purchase date. Based on their 20 years' of experience the following information is available: % of units sold Average Cost per unit No repairs 70 - Minor repairs 20 B$20 Major repairs 7 B$45 Replacement 3 B$120 The total number of units sold in the last quarter of the year was 10,000. Which two of the following correctly describes the accounting treatment of the cost of the repairs and replacements on sales of ErgoMax as at 31 December 20X8? Solution A.The amount of the possible repairs and replacement costs will be disclosed in the notes. B.A provision for the warranty of B$107,500 should be recognised for the repairs and replacements. C.Jordan's Footwear have created a constructive obligation by publishing the warranty details. D.A provision for B$200,000 would be recognised as the most likely cost of repairs and replacement. E.No provision would be made as the most likely