ACCRUED WARRANTY

3 Months Ended

Mar. 27, 2021

Guarantees and Product Warranties [Abstract]

ACCRUED WARRANTY

8. ACCRUED WARRANTY

The Company typically warrants its products against defect for 12 to 18 months, however, for certain products a customer may purchase an extended warranty. A provision for estimated future costs and estimated returns for credit relating to such warranty is recorded in the period when product is shipped and revenue is recognized and is updated as additional information becomes available. The Company’s estimate of future costs to satisfy warranty obligations is based primarily on historical warranty expense experienced and a provision for potential future product failures. Changes in the accrued warranty for the three months ended March 27, 2021 were as follows:

Balance, December 26, 2020	$	508,000
Additions		424,000
Claims		(26,000	)
Balance, March 27, 2021	$	906,000

Extended Warranties

Deferred revenue represents the purchase of extended warranties by the Company’s customers. The Company recognizes revenue from an extended warranty on the straight-line method over the life of the extended warranty, which is typically 12 to 15 months beyond the standard 12 to 18 month warranty. The Company classifies the current portion of deferred revenue under Other accrued liabilities in its condensed consolidated balance sheets. At March 27, 2021, the Company had less than $0.1 million of deferred revenue related to extended warranties.