At the beginning of 2015,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 2015 were $180 million.Five percent of the units sold were returned in 2015 and repaired or replaced at a cost of $5.3 million.The amount of warranty expense on Angel's 2015 income statement is:

Question

Quizplus · Accepted Answer

The warranty expense is 4% of net sales, which is $180 million x 4% = $7.2 million.

At the Beginning of 2015,Angel Corporation Began Offering a 1-Year