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Warranty expense
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 |
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