Mariano Corporation sells 7,000 units of inventory during the first year of operations for $300 each. The selling price includes a one−year warranty on parts. It is estimated that 4% of the units will be defective and that repair costs are estimated to be $30 per unit. In the year of sale, warranty contracts are honored on 70 units for a total cost of $2,100. What amount will be reported as Estimated Warranty Liability at the end of the year?

A. $8,400

B. $2,520

C. $6,300

D. $2,100