The electric bicycle maker Lorcane covers for one year the 3,500 units bicycles delivered in 20X5. Its workshop statistics forecast: an adjustment on 8% of the bicycles (65 per job), a motor replacement on 2% (310), a frame change on 0.4% (900). What provision does Lorcane recognise at the reporting date, discounting having no material effect?
- Bicycles covered by the warranty
- 3,500
- Adjustment rate (%)
- 8 %
- Cost of an adjustment
- 65
- Motor replacement rate (%)
- 2 %
- Cost of a motor
- 310
- Frame change rate (%)
- 0.4 %
- Cost of a frame
- 900