Elgin Company sells merchandise with a one year warranty. Sales
consisted of 2,500 units in 2012 and 2,000 units in 2013. It is estimated
that warranty repairs will average $10 per unit sold, and 30% of the
repairs will be made in 2012 and 70% in 2013 for the 2012 sales.
Similarly, 30% of repairs will be made in 2013 and 70% in 2014 for the
2013 sales. In the 2013 income statement, how much of the warranty
expense shown will be for the 2012 sales?
a. $17,500.
b. $7,500.
c. $0.
d. $25,000.

Decision alternatives should be identified before decision criteria are established. are limited to quantitative solutions are evaluated as a part of the problem definition stage. are best generated by brain-storming.

Activity-based costing (abc) is not truly a cost collection mechanism as much as it is an inventory valuation method. the main purpose for implementing an activity-based cost system is to try to overcome some of the cost distortions that occur in traditional costing from product differences when there are variations in size and complexity. however, one of the disadvantages of utilizing abc is that the additional information gathering necessary to implement costing with that level of detail might be beyond the reach of some companies with resource or financial constraints. with this in mind, what kinds of industries or companies do you think would benefit most from using activity-based costing and why? in designing or modifying an accounting system to capture appropriate costs for abc, what considerations do you think would need to be made?

What are some questions to ask a clerk in the dispatch office?