hitzu co. sold a copier (that costs $5,500) for $11,000 cash with a two-year parts warranty to a customer on august 16 of year 1. hitzu expects warranty costs to be 4% of dollar sales. it records warranty expense with an adjusting entry on december 31. on january 5 of year 2, the copier requires on-site repairs that are completed the same day. the repairs cost $130 for materials taken from the repair parts inventory. these are the only repairs required in year 2 for this copier.

1. how much warranty expense does the company report for this copier in year 1?
2. how much is the estimated warranty liability for this copier as of december 31 of year 1?
3. how much is the estimated warranty liability for this copier as of december 31 of year 2?
4. prepare journal entries to record (a) the copier’s sale; (b) the adjustment to recognize the warranty expense on december 31 of year 1; and (c) the repairs that occur on january 5 of year 2.

crow design, inc. is a web site design and consulting firm. the firm uses a job order costing system in which each client is a different job. crow design assigns direct labor, licensing costs, and travel costs directly to each job. it allocates indirect costs to jobs based on a predetermined overhead allocation rate, computed as a percentage of direct labor costs. direct labor hours (professional) 6,250 hours direct labor costs ($1,800,000 support staff salaries ,000 computer ,000 office ,000 office ,000 in november 2012, crow design served several clients. records for two clients appear here: delicious treats mesilla chocolates direct labor 700 hours 100 hours software licensing $ 4,000 $400 travel costs 8,000 1. compute crow design’s direct labor rate and its predetermined indirect cost allocation rate for 2012. 2. compute the total cost of each job. 3. if simone wants to earn profits equal to 50% of service revenue, how much (what fee) should she charge each of these two clients? 4. why does crow design assign costs to jobs?