Year-end to arrive at the warranty expense accrual for cars

Reference no: EM13104217

Connor Bly is a sales manager for an automobile dealership. He earns a bonus each year based on revenue from the number of auto sold in the year less related warranty expenses. Actual warranty expenses have varied over the prior 10 years from a low of 3% of an automobile selling price to a high of 10%. In the past, Bly has tended to estimate warranty expenses on the high end to be conservative. He must work with the dealership's accountant at year-end to arrive at the warranty expense accrual for cars sold each year.

Reference no: EM13104217

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