Note 10 - Product Warranties

12 Months Ended

Sep. 29, 2012

Product Warranty Disclosure [Text Block]

10.  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 years ended September 29, 2012 and October 1, 2011 are as follows:

	2012			2011
Accrued liability at beginning of year	$	480,000		$	570,000
Increase/Decrease in reserve		(51,345	)		402,875
Increase in reserve as a result of MCHP asset acquisition		39,000			-
Expenses		(89,012	)		(492,875	)
Accrued liability at end of year	$	378,643		$	480,000