Mariano corporation sells 8 comma 000 units of inventory during the first year of operations for $ 400 each. mariano provides a oneminusyear warranty on parts. it is estimated that 3% of the units will be defective and that repair costs are estimated to be $ 40 per unit. in the year of sale, warranty contracts are honored on 80 units for a total cost of $ 3 comma 200. what amount will be reported as estimated warranty liability at the end of the year?

amount of Estimated Warranty is $6400

Explanation:

Given data

sells =  8,000  units

1st year = $400

defective rate = 3 %

repair costs  = $40

honored = 80 units

total cost = $ 3200

to find out

amount will be reported as Estimated Warranty

solution

we will calculate here amount of Estimated Warranty that by formula given below

amount of Estimated Warranty  = [ (units sold × Defective rate ) – honored ] ×  repair cost

amount of Estimated Warranty =[ (8,000 × 3%) – 80 ] × 40

amount of Estimated Warranty = (240  – 80)  × 40

amount of Estimated Warranty = 160  × 40

amount of Estimated Warranty  = $6400

answer; specific performance;

whole quiz

1. the sum of all activities involved in getting high-quality products into the marketplace

2.operations

3. the principle of looking at the supply chain as a whole in order to improve the overall flow through the system.

4. produced; performed

5. activities producing tangible products, such as radios, newspapers, buses, and textbooks.

6. activities producing intangible and tangible products, such as entertainment, transportation, and education.

7.   customer focus

8. analyzing a competitor's products to identify desirable improvements

9. the systematic direction and control of the processes that transform resources into finished projects that create value for and provide benefits to consumers.

10. operation management.

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