THe Howell corporation produces an executive jet fuel. Direct material is $950, Direct labor is $650, variable overhead is $300. Depreciation of equipment is $500, depreciation of building is $200, supervisor salary is $300. total cost is 2, 900.

The company has an offer to produce the part for $2,100 per unit and supply 1,000 valves. If they accept this offer, the equipment can not be used elsewhere and the workers and supervisors would not be needed.

The leasing space for the production of the valves can be used by another group who I is currently leasing a space for $55,000

Should the company make or buy the valve?

What is the total incremental cost of buying the valves?