During 2013, Great Adventures Sold 150 Dune Buggies for $4,000

During 2013, Great Adventures sold 150 dune buggies for $4,000 each. The dune buggies carry a 5-year warranty for defects. Estimates suggest that repair costs will average 4% of the total selling price. The estimated warranty liability at the beginning of the year was $14,000, and $20,000 in claims was actually incurred during 2013 to honor the warranty. What was the warranty expense for 2013?

A) $10,000
B) $18,000
C) $20,000
D) $24,000

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