At the beginning of 2016, Angel Corporation began offering a two-year warranty on its products. The warranty program was expected to cost Angel 4% of net sales. Net sales made under warranty in 2016 were $180 million. Fifteen percent of the units sold were returned in 2016 and repaired or replaced at a cost of $5.3 million. The amount of warranty expense on Angel's 2016 income statement is:
a. $5.3 million.
b. $7.2 million.
c. $10.6 million.
d. $27.0 million.
