For most construction projects, Espresso Heating and Cooling buys sheet metal and forms the metal into heating/cooling ducts as needed. The company estimates the costs of making and installing ductwork for the Kerry Park shopping mall to be as follows:

Materials		$37,980
Labor to form ductwork		4,020
Labor to install ductwork		10,980
Miscellaneous variable installation costs		1,350
Fixed costs allocated based on labor hours		3,000
Total cost		$57,330

The fixed costs relate to the companys building, equipment, and office staff. The company plans to bill the Kerry Park developer $68,000 for services. Espresso is currently behind schedule on other projects and is paying a late penalty of $1,259 per day. Walt Bradley, the owner of Espresso Heating and Cooling, is considering ordering prefabricated ductwork for the Kerry Park job. The prefabricated ductwork will cost $44,510 (including the cost of sheet metal). If Walt buys the prefabricated ductwork, hell be able to reassign workers to another project and avoid five days of late fees. Should Espresso make the ductwork or buy it prefabricated?

Net incremental

benefitcost

of buying will be $

. Espresso should

makebuy

the prefabricated ductwork.