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AirWizz Products, a manufacturer of aircraft landing gear, makes 1,500 units each year of a special valve used in assembling one of its products. The
AirWizz Products, a manufacturer of aircraft landing gear, makes 1,500 units each year of a special valve used in assembling one of its products. The unit cost of producing this valve includes variable costs of $75 and fixed costs of $55. The valves could be purchased from an outside supplier at $82 each. If the valve were purchased from the outside supplier, 40% of the total fixed costs incurred in producing this valve could be eliminated. Buying the valves from the outside supplier instead of making them would cause the company's operating income to: Multiple Choice 0 Decrease by $39,000. 0 Increase by $39,000 0 Decrease by $22,500. 0 Increase by $22,500
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