Warranty Costs Brigham Company sells an electric timer that carries a 60-day unconditional warranty against product failure. Based on a reliable statistical analysis, Brigham knows that between the sale and the end of the product warranty period, three percent of the units sold will require repair at an average cost of $53 per unit. The following data reflect Brigham's recent experience: Units sold Known product failures from sales in: October November December October November December 36,000 34,000 45,000 320 550 230 210 360 410 Dec. 31 Total 115,000 1,080 590 410 Calculate the estimated liability for product warranties at December 31. $ (Assume that warranty costs of known failures have already been reflected in the records.)

Brigham Company sells an electric timer that carries a 60-day unconditional warranty against product failure. Based on a reliable statistical analysis, Brigham knows that between the sale and the end of the product warranty period, three percent of the units sold will require repair at an average cost of $53 per unit. The following data reflect Brigham's recent experience: Calculate the estimated liability for product warranties at December 31.5 (Assume that warranty costs of known failures have already been reflected in the records.)