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After sale services as a part of production cost

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if a mobile manufacturing company also provide 3 year after sale service I.e software update so does it is included in cost of production as provision for after sale services
Replies (4)

It's not a production cost ............ but companies provide service without taking any fees........ then it will be their expenses whatever they incurred ................ 

Mean it is debited to p&l a/c

YES..... ... ..... 

Dr. Warranty expense 

Cr. Warranty liability

This amount is derived based on past expectations.


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