The Simpson Company sells toasters for $50 each. During Year One, Simpson sold 20,000 toasters. Each toaster has a warranty requiring the company to fix any problems within that occur within 12 months. Company officials believe that 8 percent of the toasters will break in that period and cost $20 each to fix. In Year One, 300 toasters break and are fixed at the anticipated cost. During Year Two another 1,200 of these toasters break; however, they now cost $25 each to fix. 

What expense should the company report in Year Two in connection with this warranty?