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The Company generally provides a one-year limited product and service warranty on certain of its products. The Company provides for the estimated cost of this warranty at the time of sale. These estimates are established using historical information about the nature, frequency, and average cost of warranty claims. Warranty expense in 2016, 2015 and 2014, was $1,750, $3,076 and $1,958, respectively. MILLER INDUSTRIES SELECTED FINANCIAL DATA SYMBOL REV COS SGA Product revenues Cost of product sales Selling, general and administrative expenses 2013 2014 404,170 492,776 361,734 439,791 28,323 28,496 Current Year 2015 2016 540,966 601,119 483,353 536,840 31,491 32,318 AWCH 1 WX WC AWC Warranty Costs Beginning balance, accrued warranty costs Add: Estimated warranty expenses Less: Claims charged to the accrual Ending balance, accrued warranty costs 4,357 1,086 (2,359) 3,084 3,084 1,958 (2,420) 2,622 3,076 (2,558 3,140 1,750 Y/X CALCULATE THE RATIO FOR EACH YEAR, OBTAINING y and X FROM TABLE ABOVE. AVERAGE[r] STD DEV[ S ] #DIV/0! #DIV/0! ENTER THE CELL REFERENCE [e.g., =K14] FOR THE EXPLANATORY VALUE, X, TO APPLY TO THE AVERAGE RATIO AND STANDARD DEVIAITON. ESTIMATED WARRANTY EXPENSE [Y=rX] #DIV/0! 1 standard deviation limits Lower Upper #DIV/0! #DIV/0! Tolerable interval: C. DRAW AUDIT CONCLUSIONS Assume that $500,000 is the maximum tolerable misstatment. What conclusions/recommandations do the above calculations suggest about MLR's warranty expense for 2016? The Company generally provides a one-year limited product and service warranty on certain of its products. The Company provides for the estimated cost of this warranty at the time of sale. These estimates are established using historical information about the nature, frequency, and average cost of warranty claims. Warranty expense in 2016, 2015 and 2014, was $1,750, $3,076 and $1,958, respectively. MILLER INDUSTRIES SELECTED FINANCIAL DATA SYMBOL REV COS SGA Product revenues Cost of product sales Selling, general and administrative expenses 2013 2014 404,170 492,776 361,734 439,791 28,323 28,496 Current Year 2015 2016 540,966 601,119 483,353 536,840 31,491 32,318 AWCH 1 WX WC AWC Warranty Costs Beginning balance, accrued warranty costs Add: Estimated warranty expenses Less: Claims charged to the accrual Ending balance, accrued warranty costs 4,357 1,086 (2,359) 3,084 3,084 1,958 (2,420) 2,622 3,076 (2,558 3,140 1,750 Y/X CALCULATE THE RATIO FOR EACH YEAR, OBTAINING y and X FROM TABLE ABOVE. AVERAGE[r] STD DEV[ S ] #DIV/0! #DIV/0! ENTER THE CELL REFERENCE [e.g., =K14] FOR THE EXPLANATORY VALUE, X, TO APPLY TO THE AVERAGE RATIO AND STANDARD DEVIAITON. ESTIMATED WARRANTY EXPENSE [Y=rX] #DIV/0! 1 standard deviation limits Lower Upper #DIV/0! #DIV/0! Tolerable interval: C. DRAW AUDIT CONCLUSIONS Assume that $500,000 is the maximum tolerable misstatment. What conclusions/recommandations do the above calculations suggest about MLR's warranty expense for 2016