At the beginning of 2021, Gamma Inc. began offering a two-year warranty on its products. The warranty program was expected to cost Levil 6% of net sales. Net sales made under warranty in 2021 were $216 million. Fifteen percent of the units sold were returned in 2021 and repaired or replaced at a cost of $5.10 million. The amount of warranty expense on Gamma's 2021 income statement is: Multiple Choice $5.10 million $32.40 million $16.36 million $12.96 million