Exercise 7-8. The Elkhardt 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		$954
Direct labor		678
Variable overhead		274
Total variable costs		$1,906
Fixed costs
Depreciation of equipment		509
Depreciation of building		195
Supervisory salaries		274
Total fixed costs		978
Total cost		$2,884

The company has an offer from Duvall Valves to produce the part for $2,034 per unit and supply 970 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 $54,560 per year.

Calculate the total incremental cost of buying the valuves.