Smart Technology, Inc. was organized to sell a single product for $1,200 per unit, including...
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Accounting
Smart Technology, Inc. was organized to sell a single product for $1,200 per unit, including a 60-day warranty against defects. Engineering estimates indicate that 5% of the units sold will prove defective and require an average repair cost of $100 per unit. During the first month of operations, total sales were $408,000. Nine units sold in the first month were found defective and repaired that month. The accrued liability for product warranties at month-end should be:
A.
$1,700
B.
$2,300
C.
$ 800
D.
$ 900
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