10. Warranty

The Company provides for the estimated cost of product warranties at the time revenue is recognized. Warranty cost is recorded as cost of sales and the reserve balance is recorded as an accrued expense in the financial statements. While the Company engages in extensive product quality programs and processes, the Company’s warranty obligation is affected by product failure rates and by the related material, labor, and delivery costs incurred in correcting a product failure. If actual product failure rates, material, or labor costs differ from the Company’s estimates, further revisions to the estimated warranty liability would be recorded.

Warranty cost and accrual information for fiscal years ended September 30, 2017 and 2016:

	2017			2016
Warranty accrual as of October 1,	$	1,009,368		$	878,901
Accrued expense for fiscal year	219,390			409,013
Warranty cost incurred for fiscal year	(215,297		)	(278,546		)

Warranty accrual as of September 30,	$	1,013,461		$	1,009,368