Estimate that the total cost of servicing warranties

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Problem 1: Judd Company sells computers for $1,600 each. The cost of the computers was $857 each. During 2025, the company sold 800 computers. 80% of the sales were on account, the remainder of the sales were for cash. Judd also sells an extended warranty for $60 more, which protects the buyer for 2 years. 60% of the sales purchased the additional warranty. All extended warranty purchases were made for cash. During 2020, we spent $4,000 servicing warranties from this year's sales. We estimate that the total cost of servicing these warranties will be $22,500 for 2 years.

Reference no: EM132955433

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