The following information relates to the Magna Company for the upcoming year, based on 402,000 units. Sales Cost of goods sold Gross margin Operating expenses Operating profits Amount $8,844,000 5,628,000 3,216,000 422,100 $2,793,900 Per Unit $22.00 14.00 8.00 1.05 $ 6.95 The cost of goods sold includes $1,320,000 of fixed manufacturing overhead; the operating expenses include $112.000 of fixed marketing expenses. A special order offering to buy 62,000 units for $13.80 per unit has been made to Magna. Fortunately, there will be no additional operating expenses associated with the order and Magna has sufficient capacity to handle the order. How much will operating profits be increased if Magna accepts the special order? Ortega Industries manufactures 19,200 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 $174,000 360,000 102,000 240,000 $876,000 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