In part b ii) of this qs the requirement is to calculate the warranty provision The std warranty units are 2000 And extended warranty units are 5000 So why have they taken 7000 units in the 1st yrs provision Then 5000 units in the 2nd yrs provision?
Because, in the first year, 7,000 units could potentially claim under the warranty whereas in the second year, only 5,000 units carry that extended 2 year warranty