EXAMPLE $8$: Extended warranty $($sold separately$)$

Pixel Company sells televisions at an average price of $$900$ and offers to each customer a separate $3-$year warranty contract for $$90$ that requires the company to perform periodic services and to replace defective parts. On December $31,2022,$ the company sold $300$ televisions and $270$ warranty contracts for cash. It estimates that the $3-$year warranty costs as $$60$ per unit sold $($for parts and labor$).$ During the first quarter of $2023,$ Pixel incurred $$6,000$ of costs $($ $$2,000$ for parts and $$4,000$ for labor$)$ to provide warranty services.