During Year 1,Chang Home Centre sold 800 power washers for $350 each.The power washers carry a two-year warranty for repairs.Estimates indicate that repair costs will average 2% of sales.How much warranty expense should be accrued as a result of the Year 1 sales of this product?
A) $2,800
B) $5,600
C) $8,400
D) none until units are brought in for repairs
Correct Answer:
Verified
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