Destin Company produces water control valves, made of brass. which it sells primarily to builders for use in commercial real e alves must meet rigid specifications (l.e., the quality tolerance is smal). Valves that, upon Inspection, get rejected new materials in Casting are required to rework these items. However, new materials must be t for all reworked valves. As the cost accountant for the company, you have prepared the following returned to stage 1 of the four-stage manufacturing process, Rejected items are returned to the Casting Department; that is, they are are melted and then recast. As such, no cost data regarding the production of a typical valve: Inspect Direct materials Direct labor Varioble eanufacturing overhead Allocated fixed overhead $230 130 160 90 $610 s 13 240 178 100 $423 5 25e 330 380 410 $1,378 25 25 $180 initiated a number of quality programs. As a has enabled the company to reduce its inventory holdings from $570 000 to $335,000 Destin estimates that the annual The company, spurred by intense price pressures from foreign manufacturers, recentiy result, the rejection rate for valves has decreased from 75% to 5 5% of annual output equal n total to 15000 urasi Me reductor, in financing cost associated with inventory holdings is 11% Required: 1 What are the estimated manufacturing cost savings per year associated with the reduction in rework c 2 What is the annual financing cost savings associated with the reduction in inventory holdings? 3. Provide a dollar estimate of the total annual cost savings associated with the recently enacted quaity improvements Do not round intermediate colculations.) 1 Estemated annual manufacturing cost 2 Annual financing cost savings 3. Total estimated savings