Problem $13-3($Algo$)$

Output from a process contains $0\mathrm{.}03$ defective unit. Defective units that

go undetected into final assemblies cost $$26$ each to replace. An

inspection process, which would detect and remove all defectives, can

be established to test these units. However, the inspector, who can test

$21$ units per hour, is paid $$7$ per hour, including fringe benefits.

Assume that the line will operate at the same rate $($i$.$e$.,$ the current

production rate$)$ regardless of whether or not the inspection operation

is added.

a$-1.$ Without the inspector, what is the current hourly cost of defects?

Note: Round your answer to $2$ decimal places.

Answer is complete and correct.