Mariano Corporation sells 12,000 units of inventory during the first year of operations for $700 each. Mariano provides a one-year warranty on parts. It is estimated that 4% of the units will be defective and that repair costs are estimated to be $70 per unit. In the year of sale, warranty contracts are honored on 70 units for a total cost of $4900. What amount will be reported as Estimated Warranty Liability at the end of the year?
A)$4900
B)$13,720
C)$28,700
D)$33,600

Question

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The Answer of Mariano Corporation sells 12,000 units of inventory during the first year of operations for $700 each. Mariano provides a one-year warranty on parts. It is estimated that 4% of the units will be defective and that repair costs are estimated to be $70 per unit. In the year of sale, warranty contracts are honored on 70 units for a total cost of $4900. What amount will be reported as Estimated Warranty Liability at the end of the year?
A)$4900
B)$13,720
C)$28,700
D)$33,600

Mariano Corporation Sells 12,000 Units of Inventory During the First