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Howell 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 $940
Direct labor 600
Variable overhead 300
Fixed costs
Depreciation of equipment 500
Depreciation of building 200
Supervisory salaries 300
Problem 1: What is the incremental savings of buying the valves? (The answer should be stated in a per-unit format and is a positive number)
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