"Customer pay shop charge for repair order"
WTF is that ?? They're charging you a score for just asking them to fix it ?
7/32" is the measurement ... 7 x 32nds of an inch. Used for measuring tyres, and by the looks of this brakes too (measured in mm's on my sheets).
According to the Ford dealers checklist I have infront of me for tyres, 'red' (meaning replace NOW) is 3/32nds .. and 'yellow' is 8/32nds (when replacing is a good plan).
Also IRCM is IRMC.
Looks like you got screwed for labour for sure!