Gurland Valves Company manufactures brass valves that meet precise specification standards. All finished valves are inspected before being packaged and shipped to customers. Rejected valves are returned to the initial production stage to be melted and recast. Such rework requires no new materials in casting but requires new materials in finishing. The following unit cost data for direct materials, direct labor, and time-driven activity-based costing (ABC) are available: Costs Direct materials Casting Finishing Inspection Packing Total $225 $12 $0 $8 $245 Direct labor Support $84 $121 $24 $16 $245 $122 $164 $30 $20 $336 As a result of a quality improvement program, the reject rate has decreased from 6.4% to 5.1%, and the number of rejects has decreased by (6.4% - 5.1%) x (10,000) units. Improvements in reject rates have also led to a decrease in work-in-process inventory from $386,000 to $270,000. Inventory carrying costs are estimated to be 15.0% per year. a) What is the decrease in the number of rejected units attributable to the new quality improvement program assuming a production rate of 10,000 units? Round to the nearest whole unit. 130 b) Determine the total savings as a result of the quality improvement, assuming that capacity costs, as indicated by the time-driven ABC support costs, can be reduced if not needed. Round amounts to the nearest whole dollar.