! Required information [The following information applies to the questions displayed below.] Pepper's Automotive produces auto parts for various automotive retailers. Pepper's is evaluating the exhaust system division of the company and has come up with the following data for the year: net revenues are $1,450,000, variable costs are $510,000, and fixed costs are $595,000. Of the fixed costs, controllable fixed costs are $130,000 and noncontrollable fixed costs are $465,000. Pepper's Automotive has further analyzed the exhaust system division into three products: exhaust pipes, intake valves, and intake pipes. The income statement is available below. If intake valves were dropped, what would be the change in profits in the short run and the long run, respectively? Net revenues Variable costs Contribution margin Controllable fixed costs Controllable margin Noncontrollable fixed costs Contribution by profit center Exhaust Pipes $ 650,000 Intake Valves $ 450,000 Intake Pipes $ 350,000 65,000 225,000 585,000 225,000 220,000 130,000 65,000 520,000 175,000 65,000 160,000 225,000 130,000 65,000 $ 345,000 $ (65,000) $ 65,000 Short run: $160,000 decrease; long run: $65,000 increase Short run: $225,000 increase; long run: $65,000 decrease Short run: $160,000 increase; long run: $65,000 decrease Short run: $65,000 increase; long run: $160,000 decrease