Evergreen Corporation manufactures circuit boards and is in the process of preparing next year's budget. The proforma income statement for the current year is presented below. $3,640,000 Sales Cost of sales: Direct material Direct labor Variable overhead Fixed overhead Gross profit Selling and General & Admin. Exp. Variable Fixed Operating income $514,000 320,000 282,000 670,000 1,786,000 $1,854,000 764,000 264,000 1,028,000 $ 826,000 For the coming year, the management of Evergreen Corporation anticipates a 5 percent decrease in sales, a 10 percent increase in all variable costs, and a $52,000 increase in fixed costs. The operating profit for next year would be Multiple Choice O O $404,000. O $419,000. O O $479,000. O $757,750. Ortega Industries manufactures 21,700 components per year. The manufacturing cost of the components was determined to be as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total 188,000 430,000 109,000 310,000 $1,037,000 Assume that the fixed manufacturing overhead reflects the cost of Ortega's manufacturing facility. This facility cannot be used for any other purpose. An outside supplier has offered to sell the component to Ortega for $34. If Ortega Industries purchases the component from the outside supplier, the effect on operating profits would be a Multiple Choice O $10,800 decrease. $10,800 increase. O $32,400 decrease. $32,400 increase