Note7 - Product Warranties

9 Months Ended

Jun. 30, 2012

Product Warranty Disclosure [Text Block]

7.  PRODUCT WARRANTIES

     We offer warranties of various lengths to our customers, depending on the specific product sold.  The warranties require us to repair or replace non-performing products during the warranty period at no cost to the customer.  At the time revenue is recognized for products covered by warranties we record a liability for estimated costs that may be incurred under our warranties.  The costs are estimated based on historical experience, any specific warranty problems that have been identified and recovery of secondary warranty cost from component suppliers.  The amounts shown below are presented net of any expected cost recovery from suppliers.  Although historical warranty costs have been within our expectations, there can be no assurance that future warranty costs will not exceed historical amounts.  We regularly evaluate the adequacy of the warranty liability and adjust the balance as necessary.

Changes in our product warranty liability for the nine months ended June 30, 2012  and July 2, 2011 are as follows:

	Nine Months Ended
	June 30, 2012			July 2, 2011
Accrued liability at beginning of period	$	480,000		$	570,000
Decreases/Increases in reserve		(135,664	)		378,008
Increase in reserve as result of MCHP asset acquisition		39,000			-
Expenses		(27,336	)		(384,008	)
Accrued liability at end of period	$	356,000		$	564,000