Oak, Co. offer a three-year warranty on its products. Oak previously estimated warranty cost to be 2% of sales. Due to a technological advance in production at the beginning of year 3, Oak now believes 1% of sales to be a better estimate of warranty costs. warranty costs of $ 80,000 and $ 96,000 were reported in year 1 and year 2, respectively. Sales for year 3 were $5,000,000. what amount should be disclosed in Oak's Year 3 financial statements as warranty expense?

a. $ 50,000

b. $ 88,000

c. $ 100,000

d. $ 138,000