Frustration Fortitude Corp. (FFC) initiated a cash-settled share appreciation rights (SARs) plan for its employees on January 1, 20X1. At that time, it granted 100 SARs to each of its 200 employees. The SARs vest on December 31, 20X4, and expire on December 31, 20X6. The benchmark price was $42. The fair value of the SARs as determined using an option-pricing model, together with the corresponding market price of the shares, is detailed below:

DateFair value of one SARShare priceJanuary 1, 20X1$7$42December 31, 20X1$9$45December 31, 20X2$11$44

When the SARs were granted on January 1, 20X1, FFC estimated that 140 of the employees would continue working for the company for the duration of the vesting period and qualify for the SARs. At the 20X1 year end, 16 of the eligible 200 employees had left the company, and it was estimated that another 46 would leave during the remaining vesting period. During 20X2, an additional 24 of the remaining eligible employees left the company, and it was estimated that a further 15 would leave before the SARs vested. FFC's year end is December 31. What is the amount of compensation expense FFC will record for its year ended December 31, 20X2?

a.$45,500

b.$35,300

c.$48,700

d.$26,600