The Foundational 15 (L07-1, LO7-2, LO7-3, LO7-4, L07-5) [The following information applies to the questions displayed below) Diego Company manufactures one product that is sold for $80 per unit in two geographic regions--the East and West regions. The following information pertains to the company's first year of operations in which it produced 40,000 units and sold 35,000 units. Variable costs per unit: Manufacturing: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year! Fixed manufacturing overhead Fixed selling and administrative expense $ $ $ 24 14 2 4 $ 800,000 $ 496,000 The company sold 25.000 units in the East region and 10.000 units in the West region. It determined that $250.000 of its fixed selling and administrative expense is troceable to the West region $150,000 s traceable to the East region, and the remaining $96.000 is a common fixed expense. The company will continue to incur the total amount of its fixed manufacturing overhead costs as long as it continues to produce any amount of its only product Foundational 7-14 14. Diego is considering eliminating the West region because on internally generated report suggests the region's total gross marginin the first year of operations was $50,000 less than to traceable fred selling and administrative expenses Diego believes that it it drops the West region, the Eost region's sales will grow by 5 in Year 2 ure the contribution approach for analyzing segment profitability and assuming all else remains constantin Year 2. what would be the profit impact of dropping the West region in Year 22 Prot Increase 3 by 542.000 3