Dougan Company Manufactures and Sells Widgets

question 36

Essay

Dougan Company manufactures and sells widgets. Each widget costs $60 and sells for $100. Each widget carries a warranty that provides for free replacement if it fails for any reason during the next 36 months. In the past, 4 percent of the widgets have had to be replaced under the warranty. During May, Dougan sold 2,000 widgets and replaced 150 under warranty. Calculate the product warranty expense for the month. Show your computation.

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Definitions:

Attenuation

A process of reducing the virulence of a pathogen, often used in the development of vaccines.

Reduced Virulence

A decrease in the ability of a pathogen to cause disease, often as a result of evolutionary pressures or host-pathogen interactions.

Serial Passage

A method used in microbiology and virology involving the sequential transfer of a sample containing viruses or bacteria from one culture medium to another to study the evolution of the pathogen.

Jumped

In a biological context, often used metaphorically to describe a sudden change or rapid evolution in a species or genetic material.