2. At the beginning of the month, a supplier of a component used in our product notified us that, because of a minor design improvement, the price will be increased by 10% above the current standard price of $125 per unit. As a result of the improved design, we expect the number of defective components to decrease by 110 units per month, On average, 2,640 units of the component are purchased each month. Defective units are identified prior to use and are not returnable