A Company Sells Computers with a 6-Month Warranty

question 2

Essay

A company sells computers with a 6-month warranty. In January, the company sold 100,000 computers at $1,750 each; and 1,500 computers were turned in for repairs during that same month. The total repairs amounted to $185,000 costs from the computer parts inventory. It is estimated that 2% of all units sold will need repairs under warranty at an estimated cost of $200 per unit. Prepare the journal entries to record (a) estimated warranty expense for January and (b) warranty repair costs for January.

Assess the impact of activity-based costing on customer cost analysis reports.

Analyze the capacity analysis report to identify unused capacity in minutes.

Evaluate the financial impact of matching capacity with demand in time-driven activity-based costing.

Calculate the cost per minute of resources supplied in department-specific activities.

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Definitions:

Rapid Change

A swift adjustment or transformation experienced by an individual, organization, or environment.

Methods

Systematic procedures or techniques used to accomplish tasks or conduct research.

Employer-valued Attitudes

Traits or dispositions appreciated by employers, such as punctuality, work ethic, and flexibility, that contribute to organizational goals.

Eco-friendly Cleaning Wipe

A cleaning product made from sustainable materials that is designed to minimize harm to the environment during production, use, and disposal.