Capture Co. was organized to sell a single product that carries a 45-day warranty against...
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Accounting
Capture Co. was organized to sell a single product that carries a 45-day warranty against defects. Engineering estimates indicate that 7% of the units sold will prove defective and require an average repair cost of $ 35 per unit. During Capture's first month of operations, total sales were 500 units; by the end of the month, twelve defective units had been repaired. The liability for product warranties at month-end should be
A. $ 420.
B. $ 805.
C. $ 1,645.
D. $ 1,225
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