Fail-Safe Computer Inc

question 37

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 2019 and 2020 respectively. It paid $5,000 for materials and labour to make warranty-related repairs in 2019. What amount will be recorded as warranty expense in 2019?

• A)$5,000
• B)$12,000
• C)$15,000
• D)$18,000

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Definitions:

Secular Trend

The change from one generation to the next in an aspect of development, such as body size or in the timing of puberty.

Average Age

The mean age of a particular population or group, calculated by dividing the sum of the ages of all individuals by the number of individuals.

Amygdala

A brain structure that is part of the limbic system and plays a role in emotion, especially fear and anger.

Prefrontal Cortex

The part of the brain located in the front of the frontal lobe, involved in complex cognitive behavior, decision making, and moderating social behaviour.