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Aircraft Products, a manufacturer of aircraft landing gear, makes 2,600 units each year of a...

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Accounting

Aircraft Products, a manufacturer of aircraft landing gear, makes 2,600 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 $64 and fixed costs of $65. The valves could be purchased from an outside supplier at $71 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:

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