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Former Member
Sep 09, 2013 at 11:26 PM

Categories included in warranty cost calculation?


Apologies if this is in the wrong forum.

Manufacturing companies need to track their warranty expenses to report, as required by GAAP.

For example, if I were selling phones, when one fails during the warranty period, I need to collect the old phone and provide a refurbished one. The company would want to include the cost of shipping the replacement and postage to recover the old one, plus the cost of parts and labor to refurbish it. But some companies could have differences of opinion about how they allocate, say, call center time, or I don't know what.

I know every company is different, but if I were doing a new install of SAP at a company that had warranties, what are the expense categories that, by default, get summed up to provide a total for warranty costs?

Any help is greatly appreciated. Thanks.