Can someone please explain to me why this is correct?

Q 13.30: Wells Enterprises introduced a new machine in January 2017. The machine carries a two-year warranty, and estimated warranty costs are 2% of sales within the first 12 months and 3% of sales within the second 12 months. 2017 sales were $700,000 and its 2018 sales were $900,000. Warranty expenditures in these two years were $10,500 and $31,500, respectively. Assuming Wells uses the assurance warranty method, what should it report as estimated warranty expense for 2018? A $39,000. B $27,000. $0. $48,000. Solution During 2018, Wells would estimate $39,000 in warranty costs for sales made in 2018 (3% warranty costs on $700,000+ 2% warranty costs on $900,000)