Pharoah Company offers a five-year warranty on its products. Pharoah previously estimated warranty costs to be 3% of sales but in 2025 revised this estimate to 1% due to process and quality control improvements. Pharoah reported warranty costs of $80100 on $2670000 of sales in 2023 and $95100 on $3170000 in 2024. Sales revenue for 2025 was $5170000. What is Pharoah Company's warranty expense for 2025? $51700 $155100 $175200 $0
Pharoah Company offers a five-year warranty on its products. Pharoah previously estimated warranty costs to be 3% of sales but in 2025 revised this estimate to 1% due to process and quality control improvements. Pharoah reported warranty costs of $80100 on $2670000 of sales in 2023 and $95100 on $3170000 in 2024. Sales revenue for 2025 was $5170000. What is Pharoah Company's warranty expense for 2025? $51700 $155100 $175200 $0
Chapter1: Financial Statements And Business Decisions
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Problem 1Q
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Transcribed Image Text:Pharoah Company offers a five-year warranty on its products. Pharoah previously estimated warranty costs to be 3% of sales but in
2025 revised this estimate to 1% due to process and quality control improvements. Pharoah reported warranty costs of $80100 on
$2670000 of sales in 2023 and $95100 on $3170000 in 2024. Sales revenue for 2025 was $5170000.
What is Pharoah Company's warranty expense for 2025?
$51700
$155100
$175200
$0
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