Exhibit 9-5 Backhoe Company Estimates Its Annual Warranty Expense at 4

question 37

Multiple Choice

Exhibit 9-5 Backhoe Company estimates its annual warranty expense at 4% of annual net sales. The following information relates to the calendar year 2013:
$\begin{array} { l l} \$ 3,000,000& \text { Net sales Estimated liability under warranties:}\\100,000 & \text { January 1, 2013}\\80,000& \text { December 31,2013 , after year-end adjustment}\end{array}$

-Refer to Exhibit 9-5. The amount of warranty expense for 2013 is

• A) $ 80,000
• B) $120,000
• C) $140,000
• D) $240,000

Recognize the functions of management and their significance.

Identify the skills necessary for effective management across different levels.

Describe the management process and its components.

Distinguish between interpersonal, informational, and decisional roles in management.

---

Definitions:

Initial Cost

Initial cost refers to the expense incurred to purchase an asset or start a project, including the acquisition price and any additional costs necessary to bring the asset to a usable state.

Ether

A class of organic compounds characterized by an oxygen atom connected to two alkyl or aryl groups, often used as solvents or anesthetics.

Air Intake System

The system in a vehicle or engine that allows external air to be drawn in, filtered, and then mixed with fuel for combustion.

Cold Start

The process of starting an engine or device from a state of rest, particularly in a cold environment, which may present additional challenges.