The sales and costs have been relatively stable over the past few years, and they are expected to remain so for the foreseeable future. The income statement for the past year ended June $30,20$Y$9,$ Is as follows:

Valdespin Company

Variable Costing Income Statement

For the Year Ended June $30,20Y9$

Based on the income statement prepared in $(1)$ and the other data presented, determine the amount by which total annual operating income would be reduced below its present level if Proposal $2$ is accepted. $$

Valdespin Company Variable Costing Income Statement For the Year Ended June $30,20Yg$

By how much would total annual operating income increase above its present level If Proposal $3$ is accepted?