Olivas Corporation manufactures Errantos, a consumer product, in optimal production runs of 3,500 units 20 times per year. It is estimated that the setup costs

(including nonproductive labor) amount to $612.50 for each batch. The company's cost of capital is 20 percent, and the out-of-pocket cost to store an Erranto for one year is $1.60.

Solve the unknown inventory cost of an Erranto.