At the beginning of 2016, Angel Corporation began offering a 2-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 $211 million. Fifteen percent of the units sold were returned in 2016 and repaired or replaced at a cost of $4.50 million. The amount of warranty expense on Angel's 2016 income statement is:

$31.65 million.

$8.44 million.

$11.84 million.

$4.50 million.