500 197 Exercise 7-8. The Crown Point Corporation produces an executive jet for which it currently manufactures a fuel valve; the cost of the valve is indicated below: Cost per Unit Variable costs Direct material $951 Direct labor 636 Variable overhead 310 Total variable costs $1,897 Fixed costs Depreciation of equipment Depreciation of building Supervisory salaries Total fixed costs 993 Total cost $2,890 The company has an offer from Duvall Valves to produce the part for $2,175 per unit and supply 920 valves (the number needed in the coming year). If the company accepts this offer and shuts down production of valves, production workers and supervisors will be reassigned to other areas where, unfortunately, they really are not needed. The equipment cannot be used elsewhere in the company, and it has no market value. However, the space occupied by the production of the valve can be used by another production group that is currently leasing space for $55,200 per year. How much is the incremental cost of buying the valves? Enter your answers as amounts only with neither commas nor decimals. 296