Amelia Company has two service department, S1 and S2, and two production departments, P1 and P2. The following data relate to Dolphin Company's allocation of service department costs: Cost # of Employees Kilowatt Hours Square Feet
S1 80,000 2 800 200
S2 40,000 1 400 200
S3 100,000 3 500 400
P1 800,000 6 1,500 3,000
P2 1,200,000 6 2,500 3,000

S1 allocated its costs on the basis of number of employees. S2 allocates its costs on the basis of kilowatt hours. S3 allocates its costs on the basis of square feet. The order of allocation for Dolphin Company is S1, S2, and then S3. Dolphin Company uses the direct method to allocate its service department costs.

The allocation of costs from S1 to P2 would be:

a. $25,000
b. $40,000
c. $50,000
d. $30,000

Analyzing and computing accrued warranty liability and expense waymire company sells a motor that carries a 60-day unconditional warranty against product failure. from prior years' experience, waymire estimates that 2% of units sold each period will require repair at an average cost of $100 per unit. during the current period, waymire sold 69,000 units and repaired 1,000 units. (a) how much warranty expense must waymire report in its current period income statement? (b) what warranty liability related to current period sales will waymire report on its current period-end balance sheet? (hint: remember that some units were repaired in the current period.) (c) what analysis issues must we consider with respect to reported warranty liabilities?