At the beginning of 2012, Angel Corporation began offering a 1-year warranty on its products. The warranty program was expected to cost Angel 4% of net sales. Net sales made under warranty in 2012 were $180 million. Five percent of the units sold were returned in 2012 and repaired or replaced at a cost of $5.3 million. The amount of warranty expense on Angel's 2012 income statement is:

Question

Quizplus · Accepted Answer

$180 million x 4% = $7.2 million.

At the Beginning of 2012, Angel Corporation Began Offering a 1-Year