Shaw Company sells 3,000 units of its product for $500 each. The selling price includes a one-year warranty on parts. It is expected that 3% of the units will be defective and that repair costs will average $50 per unit. In the year of sale, warranty contracts are honored on 60 units for a total cost of $3,000. What amount will be reported on Shaw Company's balance sheet as Warranty Liability on December 31, 2012? a. $3,000 b. $4,500 c. $1,500 d. It cannot be determined