During 2006, Blass Co $\text { At December } 31,2007 \text {, Blass should report an estimated warranty liability of }$

question 22

Multiple Choice

During 2006, Blass Co.introduced a new product carrying a two-year warranty against defects.The estimated warranty costs related to dollar sales are 2% within 12 months following sale and 4% in the second 12 months following sale.Sales and actual warranty expenditures for the years ended December 31, 2006 and 2007 are as follows: $\begin{array}{rrr}&&\text {Actual Warranty }\\&\text { Sales}&\text {Expenditures }\\2006 & \$ 800,000 & \$ 12,000 \\2007 & 1,000,000 & 30,000\\&\$1,800,000&\$42,000\\\end{array}$
$\text { At December } 31,2007 \text {, Blass should report an estimated warranty liability of }$

• A)$0.
• B)$10,000.
• C)$30,000.
• D)$66,000.

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Definitions:

Labor Market Segmentation Theory

A theory suggesting that the labor market is divided into separate segments, based on demographic, industry, or job characteristics, leading to disparities in work conditions and pay.

Primary And Secondary Labor Markets

The division of the labor market into two sectors: the primary with stable, well-paid jobs with benefits, and the secondary characterized by lower wages, less stability, and fewer benefits.

Social Barriers

Obstacles that prevent individuals or groups from interacting or accessing resources due to societal norms, prejudices, or practices.

Hawthorne Plant

A reference to the site of an influential set of studies in the early 20th century in the Hawthorne Works, a factory of the Western Electric Company, which highlighted the impact of work conditions on employee productivity.