Excom Sells Radios, and Each Unit Carries a Two-Year Replacement

Multiple Choice

Excom sells radios, and each unit carries a two-year replacement warranty. The cost of repair defects under the warranty is estimated at 5% of the sales price. During September, Excom sells 100 radios for $50 each. One radio is actually replaced during September. For what amount in September would Excom debit Product Warranty Expense?

A) $50
B) $250
C) $30
D) $120