Chato company sells electrical goods covered by a one yer warranty for defects. of the sales of 70,000,000 for the year, the entity estimates that 3% will have major defect, 5% will have minor defect and 92% will have no defect. the cost of repairs would be 5000000 if all the products are sold had major defect and 3000000 if all had minor defect.
What amount should chato company recognize a warranty provision?