31. Valdez Company is considering eliminating its kitchen division, which reported an operating loss of $53,000 for the past year as shown below.

Valdez Company is considering eliminating its kitchen division, which reported an operating loss of $53,000 for the past year as shown below. Segment Income (Loss) Sales Variable costs Contribution margin Fixed costs Income (loss) $ 1,040,000 775,000 265,000 318,000 $ (53,000) If the kitchen division is dropped, all $775,000 of its variable costs are avoidable, and $190,800 of its fixed costs are avoidable. The impact on Valdez's income from eliminating this business segment would be: O A) $274,200 decrease OB) $265,000 increase C) $74,200 decrease D) $74,200 increase