During 2010, Eaton Co

Multiple Choice

During 2010, Eaton Co.introduced a new product carrying a two-year warranty against defects.The estimated warranty costs related to dollar sales are 2% within 12 months following sale and 4% in the second 12 months following sale.Sales and actual warranty expenditures for the years ended December 31, 2010 and 2011 are as follows: At December 31, 2011, Eaton should report an estimated warranty liability of

A) $0.
B) $10,000.
C) $30,000.
D) $66,000.