Use the Following Information to Answer Questions

Multiple Choice

Use the following information to answer questions
During 2009, Eversharp Co. introduced a high-quality exercise product that has a guaranteed replacement product warranty. The company expects that 2% of the products sold will need to be repaired or replaced at an average cost of $25 per unit. The company sold 300,000 units in 2010.
-Eversharp Co. incurred $15,000 of warranty costs related to the exercise product during 2010: $10,000 was for parts and $5,000 was labor cost for repair personnel. What amount should Eversharp report as estimated warranty liability in the December 31, 2010, balance sheet?

A) $ 5,000
B) $ 10,000
C) $ 15,000
D) $135,000
E) $150,000