Caddy Valves Company manufacture brass valves that meet precise specification standards. All finished valves are impacted before being packaged and shipped to customer. Rejected values are returned to the initial production stage to be melted and recast. Such rework requires no new materials in finishing. The following unit cost data for direct materials, direct labor and time driven activity based costing ABC support are available. As a results of a quality improvement program the reject rate has decreased from 6.5% to 4.7% and the number of reject has decreased by (6.5% middot 4.7%) times (12.000) units improvement in reject rates have also had 10 a decrease in work in process inventory from $380,000 to $270,000 inventory carrying costs are estimated to be 12% per year. Estimate the annual cost savings as a result of the quality improved assuming that capacity cents as indirectly by the time-driven ABC support costs can be reduced if not needed. First calculate the total rework cost per value. Then calculate the estimate annual cost savings as a result of the quality improvement