Number of units manufactured and sold.. Selling price per unit.. Variable manufacturing and selling costs per unit. Hours spent by engineers improving design.... Testing and inspection hours per unit.. Percentage of units reworked in the plant after inspection.. Average variable rework costs per freezer... Percentage of units repaired under warranty at customers' homes Average variable repair costs at customers' homes per freezer.. Estimated lost sales due to quality reputation.. Design engineer's labor rate (includes benefits and payroll taxes) Inspection costs per hour 4,000 units 1,250 650 1,300 0.5 hours 4% 480 9% $ 520 400 units $80 per hour $70 per hour Print Done