Investigating a Process (L.0.2): An unfavorable variance of $20,000 was reported for a manufacturing process. If no investigation is conducted and the process is out of control, the present value of avoidable excess production costs is $10,000. The cost of conducting an investigation is $2,000. If the process was actually out of control, the cost of correction would be an additional $1,000. There is a .20 probability that the $20,000 variance indicates the process is out of control.

Required:

a. Should the process be investigated?

b. At what out-of-control probability does the expected cost of investigating equal the expected cost of not investigating?