A Company Sells Computers at a Selling Price of $1,800

question 25

Multiple Choice

A company sells computers at a selling price of $1,800 each.Each computer has a 2 year warranty that covers replacement of defective parts.It is estimated that 2% of all computers sold will be returned under the warranty with an average cost of $150 each.During November,the company sold 30,000 computers and 400 computers were serviced under the warranty during November at a total cost of $55,000.The balance in the Estimated Warranty Liability account at November 1 was $29,000.What is the company's warranty expense for the month of November?

• A)$26,000
• B)$45,000
• C)$55,000
• D)$60,000
• E)$90,000