Problem: X Company sold 30,000 computers during 2019. It sells computers for $5,000 each. The cost of goods sold for each computer is $2,700. Each computer has a 2-year warranty that covers replacement of defective parts. It is estimated that 5% of the computers will need warranty work. That work is estimated to cost $225 per computer returned. During 2019, 350 computers were serviced under the warranty at a total cost of $78,750.
What was the warranty expense for 2019?
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