“the biggest line item in your equipment budget”
A line item is an individual entry in a budget or invoice. Biggest line item means the entry with the highest cost, and in your equipment budget limits the comparison to equipment. The chair identifies two hundred sleep trackers at ninety dollars each as the largest equipment expense.
“That allows for forty dropouts.”
Allow for something means to include a margin for it in advance. A dropout is someone who leaves before completing the activity. Starting with two hundred participants allows forty to withdraw while still leaving the desired one hundred sixty.
“wanted the social benefit spelled out”
Spell out literally means to give each letter, but often means to explain clearly and in detail. Want something spelled out requests explicit explanation. The reviewers want the research's benefit to society stated concretely.
“You'll hear from us in two weeks.”
You'll hear from us … is a standard promise of contact after an interview or review, similar to We'll be in touch. Hear from someone means to receive their communication. The person awaiting a reply can use hear back, as in B2-34 and B2-44. Here the result will arrive in two weeks.
“Try not to lose sleep over it”
Lose sleep over something means to be unable to sleep from worry, or simply to worry excessively. Don't lose sleep over it. offers reassurance. The chair makes a sleep-related joke to a sleep researcher: Frank could become his own first data point if worry keeps him awake.