Question

Adrian's Company sells different electronic gadgets. One of his products are wireless speakers which can be sold at P10,000 each. The buyers are provided with a 2-year warranty that is expected to cost the company P500 per unit in the year of sale and P1,000 per unit in the year following the sale. The company sold 120 units in 2019 and 150 units in 2020. Actual payments for warranty claims were P70,000 and 110,000 in 2019 and 2020, respectively. How much would be the warranty expense related to the sales of wireless speakers for 2019 (2 nts)

          Adrian's Company sells different electronic gadgets. One of his products are wireless speakers which
can be sold at P10,000 each. The buyers are provided with a 2-year warranty that is expected to cost the
company P500 per unit in the year of sale and P1,000 per unit in the year following the sale. The
company sold 120 units in 2019 and 150 units in 2020. Actual payments for warranty claims were
P70,000 and 110,000 in 2019 and 2020, respectively.
How much would be the warranty expense related to the sales of wireless speakers for 2019 (2
nts)

Show more…

Adrian's Company sells different electronic gadgets. One of his products are wireless speakers which
can be sold at P10,000 each. The buyers are provided with a 2-year warranty that is expected to cost the
company P500 per unit in the year of sale and P1,000 per unit in the year following the sale. The
company sold 120 units in 2019 and 150 units in 2020. Actual payments for warranty claims were
P70,000 and 110,000 in 2019 and 2020, respectively.
How much would be the warranty expense related to the sales of wireless speakers for 2019 (2
nts)

Added by Ricky P.

Horngren’s Cost Accounting

Srikant M. Datar, Madhav V. Rajan 16th Edition

Instant Answer

Solved by Expert Chareen Guzman

Step 1

For 2019: The company sold 120 units in 2019, and the warranty cost per unit in the year of sale is P500. So the expected warranty expense for 2019 is 120 units * P500 per unit = P60,000. Show more…

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Please include warranty expense related to the sales of wireless speakers for both 2019 and 2020, please, if possible. Thank you! Adrian's Company sells different electronic gadgets. One of his products is wireless speakers, which can be sold at P10,000 each. The buyers are provided with a 2-year warranty that is expected to cost the company P500 per unit in the year of sale and P1,000 per unit in the year following the sale. The company sold 120 units in 2019 and 150 units in 2020. Actual payments for warranty claims were P70,000 and P110,000 in 2019 and 2020, respectively. How much would be the warranty expense related to the sales of wireless speakers for 2019?

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