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QUESTION
Specialty Appliances and More, Inc. (SAM) has a three-year warranty on their solar refrigerators for defects.
Specialty Appliances and More, Inc. (SAM) has a three-year warranty on their solar refrigerators for defects. Warranty costs are estimated at 2% of sales in year one (the year of the sale), and5% of sales in each of the following two years. The warranty expires at the end of the third year. Annual sales and actual warranty repair costs were as follows:
