Smart Technology, Inc. was organized to sell a single product for $1,200 per unit, including...
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Smart Technology, Inc. was organized to sell a single product for $1,200 per unit, including a 60-day warranty against defects. Engineering estimates indicate that 5% of the units sold will prove defective and require an average repair cost of $100 per unit. During the first month of operations, total sales were $408,000. Nine units sold in the first month were found defective and repaired that month. The accrued liability for product warranties at month-end should be:
| A. | $1,700 | |
| B. | $2,300 | |
| C. | $ 800 | |
| D. | $ 900 |
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