Robertson Corp

question 61

Multiple Choice

Robertson Corp. uses the revenue approach to account for warranties. During 2020, the company sold $ 750,000 worth of products, all of which carried a two-year warranty (included in the price) . It was estimated that 2% of the selling price represented the warranty portion, and that 40% of this related to 2020, and 60% to 2021. Assuming that Robertson incurred costs of $ 5.500 to service the warranties in 2021, what is the net warranty revenue (revenue minus warranty costs) for 2021?

• A) $ 3,500
• B) $ 9,500
• C) $ 5,500
• D) $ 9,000

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Definitions:

Actively Take Steps

The process of making conscious decisions to move forward with actions that contribute to achieving a particular goal or outcome.

Generating Ideas

The process of coming up with new, innovative concepts, solutions, or approaches, often as part of a creative or problem-solving exercise.

Roadblocks

Obstacles or barriers that impede progress towards achieving a goal or completing a task.

Natural Reward Strategy

A method of motivating behavior by incorporating inherently rewarding or satisfying aspects into tasks or activities.