During 2010, Eaton Co

question 8

Multiple Choice

During 2010, Eaton 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, 2010 and 2011 are as follows: At December 31, 2011, Eaton should report an estimated warranty liability of

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

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Definitions:

Moderately Difficult

Describes a task or challenge that requires substantial effort or skill but is not so hard that it becomes overwhelming or unachievable.

External Events

Occurrences outside an organization that might impact its operations, strategy, or performance, such as economic changes, natural disasters, or regulatory shifts.

McGregor's Theory Y

A management theory that suggests employees are inherently motivated and will fulfill their work and responsibilities without coercion if provided with the right conditions.

Lower-order Needs

Basic human necessities in Maslow's hierarchy of needs, such as physiological and safety needs, which are fundamental for survival and security.