Young Company sells an electric timer that carries a 3-month unconditional warranty against product failure. Based on a reliable statistical analysis, Young knows that between the sale and the end of the product warranty period, four percent of the units sold will require repair at an average cost of \(\$ 50\) per unit. The following data reflect Young's recent experience:

Calculate, and prepare a journal entry to record, the estimated liability for product warranties at December 31. Assume that warranty costs of known failures have already been reflected in the records.

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October November December Dec. 31 Total Units sold. 36,000 34,000 45,000 115,000 Known product failures from sales in: October.. 320 550 210 1,080 November 230 360 590 December. 410 410