Main post – Reply with 100+ wordsA new CFO at Hanson Technologies is tasked with

Main post – Reply with 100+ wordsA new CFO at Hanson Technologies is tasked with the responsibility of analyzing costs in an effort to reduce them in preparation for expansion into the global markets. Much of the cost cutting so far has been from finding lower cost suppliers for much of the materials, reducing machine maintenance schedules, and hiring contract labor to reduce benefits to longer term employees. The CFO has now been looking for additional cost cutting strategies and has identified warranty expense as one of the costs that needs to be cut. He is considering two proposals to do so. The first is to cut out warranties on their product altogether to reduce the warranty expense to zero. The other is to cut the estimated warranty liability percentage down to 25% of its current value. Discuss whether either of these options will work for this purpose. What are your thoughts on which, if either, option should be enacted? What would you do if you were the CFO in this case?#2: Additional Post Reply – Reply with 60+ wordsThe new CFO at Hanson Technologies is trying to cut some costs to help with expenses. The first option to reduce warranty expenses to zero, while the second is to cut the estimated warranty liability percentage to 25% of its current value. Both of these options would work in cutting the costs down, but the first would give more cost cuts over the second.These cut backs would not come without a cost though. With the first option, Hanson Technologies could lose business, which would result in a loss of revenue, and could end up with a customer dissatisfaction rating. If no warranty was offered Hanson Technologies might lose those customers that would not want to purchase a product without a warranty by the manufacturer, and look to their competitors. If this was my choice, I would lean toward the second option of phasing out the warranties. Although this option could possibly set Hanson Technologies up for unexpected and non-budgeted costs in the future.The company could design better products, reducing product reliability and maintainability costs. If the products were designed better, upping the quality, not only are the warranty returns lowered, but customer satisfaction is raised.#3: Additional Post Reply – Reply with 60+ wordsAs CFO of the Hanson Technologies and deemed with the task of cutting cost to prepare for global expansion I would cut the estimated warranty liability percentage down to 25% of its current value.My thought process behind this is What is a Warranty Expense (2018) warranty expense is related to product repair, replacement, or compensation. Warranty expenses should be recorded when probable and can be estimated according to the FASB.With that in mind as the CFO, this would be one area I could cut the cost to aid in the funding of global expansion. The reason being is that warranty expenses are considered a liability and can be estimated to predict the future cost. Bank (2019) warranty expense should be recorded upfront. The journal entry is a debit to warranty liability and a credit to inventory. By doing so revenues are not overstated during any given period.Cutting the estimated warranty liability percentage down to 25% makes good business sense. This will allow protection under the warranty if problems arise and allow the CFO to predict what the cost savings would be in doing so. This would not be a permanent change only temporarily until the company reached the goal of global expansion. I do believe after this time I would reassess which products had lower warranty issues and consider cutting back expenses on those types of products. Those with higher issues would revert to full coverage. In the long run, the cut back could prove to be beneficial as revenue could have been wasted on unnecessary warranty coverage.

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