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The unit selling price of a new entity's product is US $10,000. The buyers are provided with a 2-year warranty that is expected to cost the entity US $250 per unit in the year of the sale and US $750 per unit in the year following the sale. The entity sold 80 units in the first year of operation and 100 units in the second year. Actual payments for warranty claims were US $10,000 and US $65,000 in years one and two, respectively. The amount charged to warranty expense during the second year of operation is:
A. US $100,000
B. US $25,000
C. US $85,000
D. US $65,000
Answer: A
Explanation:
Under the accrual method, the total estimated warranty costs are charged to operating expense in the year of sale. The total estimated warranty cost per unit is US $1,000$250 +$750). In year two, 100 units were sold, so the warranty expense recognized is US $100,000.
NEW QUESTION: 2
Which two statements about 802.1X are true? (Choose two.)
A. It can allow and deny port access based on user identity.
B. It works only with wired devices.
C. It is a Cisco proprietary standard.
D. By default, it allows devices that lack 802.1 support.
E. It can allow and deny port access based on device identity.
Answer: B,E
NEW QUESTION: 3
Which of the following is presumed to be intended to create legal relations?
A. A social arrangement.
B. A promise by a father to make a gift to his son.
C. A commercial transaction.
D. A domestic arrangement.
Answer: C
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