EZ Wheels Corporation Manufactures Kick Scooters

Multiple Choice

EZ Wheels Corporation manufactures kick scooters. The company offers a one-year warranty on all scooters. During 2017, the company recorded net sales of $1,900 million. Historically, about 4% of all sales are returned under warranty and the cost of repairing and or replacing goods under warranty is about 30% of retail value. Assume that at the start of the year EZ Wheels' balance sheet included an accrued warranty liability of $16.3 million and at the end of the year, the accrued warranty liability balance was $12.4 million.
What was EZ Wheels Corporation's warranty expense for 2017?

A) 12.4 million
B) 22.8 million
C) 76.0 million
D) 26.7 million
E) None of the above