Pepper€™s Automotive has further analyzed the exhaust division into three products, exhaust pipes, intake valves, and intake pipes. The income statement is available below.

What is the change in profit in both the short run and long run by dropping intake valves from their productline?

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Exhaust Pipes $500,000 50,000 50,000 50,000 400,000 100,000 $300,000 Intake Valves Intake Pipes S200,000 100,000 100,000 $300,000 150,000 150,000 50,000 100,000 150,000 $ (50,000) Net revenues Variable costs Contribution margin Controllable margin Contribution by profit center Controllable fixed costs 100,000 50,000 S 50,000 Noncontrollable fixed costs