Synergy Appliances Sells Dishwashers with a 4-Year Warranty

question 49

Multiple Choice

Synergy Appliances sells dishwashers with a 4-year warranty. In 2013, sales revenue for dishwashers is $85,000. The company estimates warranty expense at 4.5% of revenues. What is the 2013 warranty expense?

• A)$3,825
• B)$956.25
• C)$0
• D)$3,000

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Definitions:

Hotel Industry

A segment of the hospitality sector that focuses on providing lodging facilities and other related services to travelers and guests.

Activity-Based Costing (ABC)

A method of allocating overhead and indirect costs based on the activities that drive these costs, with the aim of providing more accurate product costing.

Common Costs

Expenses incurred in the production of multiple products or delivery of multiple services that cannot be directly attributed to any individual product or service.

More Than One Activity

A reference to operations or processes that involve multiple tasks or actions, often requiring a broad set of skills or resources.