=+4 Ordering costs Ordering of components Number of orders $21 per order 5 Engineering costs Designing and managing of products and processes Engineering-hour capacity $35 per engineering-hour Sounds’ management views direct materials costs and direct manufacturing labour costs as variable with respect to the units of CP99 manufactured. Over a long-run period, each of the overhead costs described in the preceding table varies, as described, with the chosen cost drivers.

The following additional information describes the existing design:

a Testing and inspection time per unit is 2.5 hours.