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Cutters sells razors at $50 each. The razors have a 90 day warranty that requires...

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Accounting

Cutters sells razors at $50 each. The razors have a 90 day warranty that requires the Company to replace any nonworking razor. The Companys cost per razor is $8. The manufacturer estimates an 8% of sales dollars failure rate. In a recent month 150 razors were sold for $7,500 cash. 10 razors were replaced during the month and the beginning balance in the warranty liability account was a credit of $1,000. (A) What is the warranty expense for this month and (B) What is the month end balance in the liability account?

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