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Question - A sewing machine company sells its hemming machine for $300.00 which includes a one-year warranty.
The warranty cost for each machine is $50.00.
During 2020, the sewing machine company sold 200 hemming machines and incurred $7500.00 on warranty repairs and in 2021, the company incurred warranty costs of $3200.00.
The sewing machine company uses the expense warranty accrual method.
What will be the sewing machine company warranty expense for 2021?
a) $2500.00
b) $700.00
c) $3200.00
d) $7500.00
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