Shear Company Sells Computer Equipment with a 2-Year Warranty

question 32

Multiple Choice

Shear Company sells computer equipment with a 2-year warranty. Prior experience indicates that costs associated with this warranty average 1% in the first year and 2% in the second year. In 2021, Shear had sales of $1,800,000. It paid $250,000 for materials and labour to make warranty-related repairs in 2021. What amount should the warranty expense for 2021 be?

• A)$18,000
• B)$36,000
• C)$54,000
• D)$250,000

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Definitions:

Registered Nurse

A healthcare professional who has completed the necessary education and licensure requirements to provide patient care and education.

Incident/Occurrence Report

Documentation of any unusual or unexpected event in a healthcare setting that can affect the safety of patients, staff, or others.

Legal Lawsuit

A court-based process in which an individual or entity brings a legal claim or dispute against another party, seeking a legal or equitable remedy.

Quality Improvement Program

A systematic approach to the assessment and improvement of services and operational processes to meet or exceed customer expectations.