Acompany currently using an inspection process in its material receiving department is trying to install an overall cost reduction program. one possible reduction is the elimination of one inspection position. this position tests material that has a defective content on the average of 0.04. by inspecting all items, the inspector is able to remove all defects. the inspector can inspect 50 units per hour. the hourly rate including fringe benefits for this position is $9. if the inspection position is eliminated, defects will go into product assembly and will have to be replaced later at a cost of $10 each when they are detected in final product testing.

a-1.
if the inspector position is eliminated, what will the hourly cost of defects be?

cost per hour $

a-2. should this inspection position be eliminated?
yes
no

b.
what is the cost to inspect each unit? (round your answer to 2 decimal places.)

cost per unit $

c.
is there benefit (or loss) from the current inspection process? how much? (input all amount as positive value. round your per unit value to 2 decimal places.)

hourly per unit
$ $