Multiple Choice
Shear Company sells computer equipment with a 2-year warranty. Prior experience indicates that costs associated with this warranty average 1% in the first year and 2% in the second year. In 2021, Shear had sales of $1,800,000. It paid $250,000 for materials and labour to make warranty-related repairs in 2021. What amount should the warranty expense for 2021 be?
A) $18,000
B) $36,000
C) $54,000
D) $250,000
Correct Answer:
Verified
Correct Answer:
Verified
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