Digital Equipment Corporation manufactures and sells computers. The company provides a one year warranty on every computer it sells. During the first quarter of fiscal 2013 the company recorded sales of $189,000. The company estimates warranty costs will average 4% of sales. During the first quarter actual warranty costs totaled $6,880.

At the end of the first quarter Digital Equipment Corporation will record warranty expense of:

Group of answer choices

680

6,880

14,440

7,560