What is the expected value of the warranty cost provision

Assignment Help Accounting Basics
Reference no: EM132556646

Question - Sunland Company uses IFRS for its financial reporting. It produces machines that sell globally. All sales are accompanied by a one-year warranty. At the end of the year, the company has the following data:

3800 units were sold during the year.

The trend over the past five years has been that 3% of the machines were defective in some way and had to be repaired. Of this 3%, half required a full replacement at a cost of $3100 per unit and half were able to be repaired at an average cost of $310.

Required - What is the expected value of the warranty cost provision?

a. $388740

b. $176700

c. $353400

d. $194370

Reference no: EM132556646

Questions Cloud

Which component of the coso risk management framework : On July 21, 2015, Toshiba CEO Hisao Tanaka announced his resignation in face, Which component of the COSO risk management framework failed at Toshiba and why
What are the different types of dividends : What are the different types of dividends, and how is a dividend paid?
Compute how many kilograms of direct material purchased : Assume for a firm, If the 30 June inventory of materials was 5000 kg, how many kilograms of direct material should be purchased during July?
Keep the format reader-friendly : Answer the following questions with detailed explanations. Keep the format reader-friendly
What is the expected value of the warranty cost provision : Sunland Company uses IFRS for its financial reporting. It produces machines that sell globally. What is the expected value of the warranty cost provision
Determine what is the cost per unit of cheap : Hi Tech Products manufactures three (3) types of CD players. Under an activity-based product costing system, what is the cost per unit of Cheap?
Disadvantages of applying cover call : Disadvantages of applying cover call and strip trade in speculator. (Not disadvantage of cover call and strips)
Computers with the new computers : Use the old computers for 1 more year and then replace them with the new computers that will then be replaced every 3 years
Calculate the historical growth rate in earnings : Calculate the next expected dividend per share, D1. (Hint: D0 = 0.4($6.50) = $2.60.) Assume that the past growth rate will continue.

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd