If Product X Cost $50 and Had a 4 Percent

question 195

Multiple Choice

If product X cost $50 and had a 4 percent failure rate during the warranty period,the entry to record the estimated product warranty expense in a month when 1,000 units are sold would be

• A) Product Warranty Expense 2,000
• Estimated Product Warranty Liability 2,000
• B) Product Warranty Expense 200
• Estimated Product Warranty Liability 200
• C) Product Warranty Expense 20
• Cash 20
• D) Estimated Product Warranty Liability 50
• Cash 50