Can you please explain how the answer is $40,000? Please show the formula used to do so. Thank you!

Supreme Inc. sells its products with a 3-year warranty. The company estimates warranty costs relating to sales during the current year are as follows: Current year (Year 1): $10,000; Year 2: $25,000; Year 3: $15,000. Assume that actual warranty costs during the current year were as estimated. What is the amount of the estimated warranty liability that Supreme should recognize on its current year balance sheet? $40,000 $50,000 $10,000