Wildhorse Co$.$ sells remote control airplane engines, which carry a one$-$year warranty. If a customer brings in a defective engine, he replaces the engine with a new one from his inventory. Wildhorse estimates that $2\%$ of units sold will be defective. As at January $1,2027,$ the Warranty Liability had a credit balance of $$400.$

Wildhorse provided the following information for his year end of December $31,2027.$

$\backslash$table$[[$Cost per engine,$$145$