Warranty costs

3 Months Ended

Mar. 31, 2012

Note 6 – Warranty costs

We typically offer a one year warranty for our base professional and consumer products, but some of our professional products have a two year warranty. Warranty coverage provided is for labor and parts necessary to repair products during their warranty period. We account for the estimated warranty cost of the standard warranty coverage as a charge to cost of revenue when revenue is recognized. Factors that affect our warranty reserves include the number of units sold, historical and anticipated product performance, and the cost per repair. While we engage in extensive product quality programs and processes, including actively monitoring and evaluating the quality of our component suppliers, our estimated warranty obligation is affected by ongoing product failure rates, specific product class failures outside of our baseline experience, material usage, and service delivery costs incurred in correcting a product failure. If actual product failure rates, material usage or service delivery costs differ from our estimates, revisions to the estimated warranty liability would be required. Assumptions and historical warranty experience are evaluated to determine the appropriateness of such assumptions. We assess the adequacy of the warranty provision and we may adjust this provision if necessary.

The following table provides the detail of the change in our product warranty accrual, which is a component of accrued liabilities on the Condensed Consolidated Balance Sheets as of March 31, 2012 and 2011:

	March 31,			March 31,
	2012			2011
Warranty accrual, beginning of period	$	785,412		$	529,374
Charges to cost and expenses relating to new sales		398,181			278,625
Costs of product warranty claims/change of estimate		(290,673	)		(227,547	)
Warranty accrual, end of period	$	892,920		$	580,452