A company has a selling price of 1800 each for its printers. Each printer has a 2 year warranty that covers replacement of defective parts. It is estimated that 2% of all printers sold 30000 printers, and 400 printers were serviced under the warranty. What is the company's warranty expense for the month of November? a. $26,000
b. $45,000
c. $55,000
d. $60,000
e. $90,000

$90,000

Explanation:

From the question above a company sells each of its printers for 1,800

Each of the printer sold comes with a 2 year warranty

An estimate of 2% of printers sold 30,000

400 printers where serviced under the warranty

To calculate the company's warranty expense for the month of December, the first step will be to find the number of estimate printers that was returned

= printers sold×rate of printer returned

= 30,000×2/100

= 30,000×0.02

= 600

Therefore, the warranty expenses can be calculated as follows

Number of estimated printers returned×Average warranty cost

= 600×150

= $90,000

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