A Company Sells Computers at a Selling Price of $1,800

question 110

Multiple Choice

A company sells computers at a selling price of $1,800 each. Each computer has a 2 year warranty that covers replacement of defective parts. It is estimated that 2% of all computers sold will be returned under the warranty at an average cost of $150 each. During November, the company sold 30,000 computers, and 400 computers were serviced under the warranty at a total cost of $55,000. The balance in the Estimated Warranty Liability account at November 1 was $29,000. What is the company's warranty expense for the month of November?

• A) $26,000
• B) $45,000
• C) $55,000
• D) $60,000
• E) $90,000

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Definitions:

Thalamus

A part of the brain that serves as a major relay station for sensory information, excluding smell, transmitting it to the appropriate cortical areas.

Cerebellum

A part of the brain located at the back of the skull which is responsible for coordinating voluntary movements and maintaining balance, posture, and equilibrium.

Biological Clock

An internal timing mechanism in organisms that controls the cycle of daily activities, such as sleep and wakefulness, based on a roughly 24-hour period.

Subjective Night

The time during a 24-hour period when the biological clock is telling a person to go to sleep.