Hi-Tech Company Produces Widgets That Cost $60 Each and Have $\begin{array}{llr} \text {Product Warranty Expense } &300\\ \text { Estimated Product Warranty Liability } &&300\\\end{array}$

question 73

Multiple Choice

Hi-Tech Company produces widgets that cost $60 each and have a 5 percent failure rate.If 500 widgets are sold,the entry to record the estimated product warranty expense would be

• A)
• \(\begin{array}{llr}
• \text {Product Warranty Expense } &300\\
• \text { Estimated Product Warranty Liability } &&300\\
• \end{array}\)
• B)
• \(\begin{array}{llr}
• \text { Product Warranty Expense } &1,500\\
• \text { Estimated Product Warranty Liability } &&1,500\\
• \end{array}\)
• C)
• \(\begin{array}{llr}
• \text { Product Warranty Expense } &150\\
• \text {Cash } &&150\\
• \end{array}\)
• D)
• \(\begin{array}{llr}
• \text { Estimated Product Warranty Liability } &75\\
• \text { Cash} &&75\\
• \end{array}\)

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Definitions:

Low Need for Achievement

A psychological characteristic where an individual has little motivation or desire to achieve success or excel in tasks.

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The drive or desire to accomplish goals or meet high standards of performance.

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Tasks or challenges that are perceived as extremely difficult or demanding in terms of effort, skill, or resources required.

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The ability to resist the temptation for an immediate pleasure in favor of a later, often greater, reward.