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Video-Technical, Inc. sells a single product for $600 per unit, including a 60-day warranty against...

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Accounting

Video-Technical, Inc. sells a single product for $600 per unit, including a 60-day warranty against defects. It is estimated that 5% of the units sold will prove defective and require an average repair cost of $50 per unit. During September, total sales were $204,000. Nine of the units that were sold during September were found to be defective and repaired during September.

What amount should be added to the Estimated Liability for Product Warranties for September?

a. $1,150

b. $850

c. $450

d. $400

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