Log in

View Full Version : Warranty expense


abogunia
May 6, 2012, 11:16 AM
Mason Auto Repair specializes in the repair of foreign car transmissions. To encourage business, Mason offers a six-month warranty on all repairs. The following data are available for 2011:

Transmissions repaired, 2011 3,500
Expected frequency of warranty claims 0.03 per repair
Actual warranty claims, 2011 $36,800
Estimated warranty liability, 1/1/11 $29,300
Cost of each warranty claim $320

And I need to calculate the warranty expense for 2011