Question 2 - Homework: Chapter X + X -CD ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252FIms.mheducation.com%252Fmghmiddlewar... Q _ * it Apps DOES THE KETO DI... Reading list Homework: Chapter 17 (B) @ Saved Help Save & Exit Submit 2 Destin Company produces water control valves, made of brass, that it sells primarily to builders for use in commercial real estate construction. These valves must meet rigid specifications (1.e., the quality tolerance is small). Valves that, upon Inspection, get rejected are returned to the Casting Department; that is, they are returned to stage 1 of the four-stage manufacturing process. Rejected Items are melted and then recast. As such, no new materials In Casting are required to rework these Items. However, new materials must be added In the Finishing Department for all reworked valves. As the cost accountant for the company, you have prepared the following 2.5 cost data regarding the production of a typical valve: points Cost Casting Finishing Inspection Packing Total Direct materials $ 220 $ 15 $ 18 $ 245 X ot47:42 Direct labor 125 135 25 25 310 Variable manufacturing overhead 150 165 20 355 Allocated fixed overhead 85 95 120 390 eBook $ 580 $ 410 $ 165 $ 145 $ 1, 300 Print The company, spurred by Intense price pressures from foreign manufacturers, recently Initiated a number of quality programs. As a References result, the rejection rate for valves has decreased from 7.3% to 5.3% of annual output (equal in total to 15,000 units). The reduction In reject rates has enabled the company to reduce its Inventory holdings from $560,000 to $330,000. Destin estimates that the annual financing cost associated with Inventory holdings Is 10%. Required: 1. What are the estimated manufacturing cost savings per year associated with the reduction In rework costs? 2. What are 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 quality Improvements. (Do not round Intermediate calculations.) 1. Estimated annual manufacturing cost savings 2. Annual financing cost savings 3. Total estimated savings Mc Graw Hill of CO D 9:44 PM WE 2/20/2022