How much is the warranty expense? Henry Stevenson works as the manager of Used Car Superstore. The business prides itself on including a three-year bumper-to-bumper warranty on all car sales—no matter...

How much is the warranty expense?

Henry Stevenson works as the manager of Used Car Superstore. The business prides itself on including a three-year bumper-to-bumper warranty on all car sales—no matter how old the car. Henry’s job responsibilities include estimating the amount of the warranty on each car sale. Henry knows that the older the car is, the higher the warranty cost will be to the business. Edward Wolf, the CEO, has been criticizing Henry for the amount of warranty expense he has been recording. Edward believes that Henry is overestimating the cost of the warranty and has told Henry that he needs to cut the cost in half. What should Henry do? What would you do?