Fail-Safe Computer Inc

question 4

Multiple Choice

Fail-Safe Computer Inc. sells equipment with a 2-year warranty. Prior experience indicates that costs for warranty repairs average 3% in the first year, and 2% in the second year. Sales were $300,000 and $400,000 in fiscal 2012 and 2013 respectively. It paid $5,000 for materials and labour to make warranty-related repairs in 2012. What amount will be recorded as warranty expense in 2012?

• A)$15,000
• B)$20,000
• C)$21,000
• D)$26,000

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Definitions:

Eating Binges

Episodes of excessive food consumption within a short time period, often accompanied by a sense of loss of control over eating behaviors.

Anorexia Nervosa

A psychological and potentially life-threatening eating disorder characterized by an extremely low body weight relative to stature, an intense fear of gaining weight, and a distorted perception of body weight and shape.

Dieting

The practice of eating in a regulated manner to achieve or maintain a controlled weight.

Anorexia Nervosa

A serious psychological and eating disorder characterized by an extreme fear of weight gain and a distorted body image, leading to restricted food intake and excessive weight loss.