During Year $1,$ Ward Company introduced a new product carrying a two$-$year warranty against defects, which is included in the selling price of the product. The estimated warranty costs are $2\%$ of sales within the first $12$ months following the sale and $4\%$ in the second $12$ months following the sale. Sales and actual warranty expenditures for the years ended December $31$ of Year $1$ and Year $2$ follow.

$\backslash$table$[[,$Sales,$\backslash$table$[[$Actual Warranty$],[$Expenditures$]]],[$Year $1,$$$1,320,000,$$$19,800$