Computer Inc

question 30

Multiple Choice

Computer Inc.sells equipment with a 3-year warranty.Prior experience indicates that costs for warranty repairs average 3% in the first year,2% in the second year and 1% in the third year.In 2017,Computer Inc.had sales of $800,000.It paid $20,000 for materials and labour to make warranty-related repairs in 2017.What amount will be recorded as warranty expense in 2017?

• A)$20,000
• B)$24,000
• C)$28,000
• D)$48,000