How to Calculate Total Estimated Cost of Repairs Under Warranty?

What is the total estimated cost of repairs under the warranty?

How was the estimated cost of repairs calculated under the warranty?

Calculation of Total Estimated Cost of Repairs Under Warranty

To calculate the total estimated cost of repairs under the warranty, we need to follow a simple formula.

When a customer was given $480 cash under the terms of the warranty, it represents a portion of the total estimated cost of repairs under the warranty. The total estimated cost of repairs is calculated based on the sales price of the consumer electronics and the percentage set for repair costs.

In this case, the cost to repair defects under the warranty is estimated at 4.5% of the sales price. To calculate the total estimated cost of repairs, we need to multiply the sales price by the percentage allocated for repair costs.

First, we convert the percentage 4.5% to a decimal by dividing it by 100, which gives us 0.045. Next, we multiply the sales price, which is $436,000, by 0.045 to find the estimated cost of repairs under the warranty.

Therefore, the total estimated cost of repairs under the warranty is $436,000 * 0.045 = $19,620.

By using this simple calculation, businesses can accurately estimate the total cost of repairs under warranty and ensure they are prepared to cover any potential defects or issues that may arise.