Answer:
$22.8 million
Explanation:
Calculation to determine EZ Wheels Corporation’s warranty expense for 2017
Using this formula
2017 Warranty expense=Net sales*Percentage of sales returned*Percentage cost of replacing goods
Let plug in the formula
2017 Warranty expense=$1,900 million x 4% x 30%
2017 Warranty expense= $22.8 million
Therefore EZ Wheels Corporation’s warranty expense for 2017 is $22.8 million