Warranty service cuts into the profitability of your products because you don't know how much it really costs you.
Manufacturing costs are not the whole picture. If you aren't tracking the costs of repairs, how can you ensure profitability of your warranty and entitlement products?
Worse, if you don't currently offer extended warranties and service agreements, you're missing out on quality revenue. Not only are you giving up a profit center, but it's a reason your customers are looking elsewhere.