Table:
|  | 2019 | 2018 |
| --- | --- | --- |
| Balance at beginning of year | $520 | $557 |
| Warranty costs incurred | (398) | (40) |
| Product warranty accrual | 407 | 3 |
| Balance at end of year | $529 | $520 |
Paragraphs:
15. Product Warranties
The Company generally provides its customers with a one-year warranty regarding the manufactured quality and functionality of its products. For some limited products, the warranty period has been extended. The Company establishes warranty reserves based on its product history, current information on repair costs and annual sales levels. As of April 30, 2019, and 2018, respectively, changes in the carrying amount of accrued product warranty costs, reported in accrued expenses on the consolidated balance sheet, were as follows (in thousands):
Question:
How does the company establish warranty reserves?
Answer: based on its product history, current information on repair costs and annual sales levels