K Stacked Stones, Inc. is a landscaping business owned by Olivia Colman. The business currently operates in three geographic regions: North, South, and East. A partial segmented income statement is shown below for the company Contribution Margin (Traceable Fixed Costs) Segment Margin North $28,500 South $22,300 East (15,000) $13,500 $5,000 (9,000) (4,000) $13,300 $1,000 The company's common fixed costs equal $9,000 and are equally allocated to the three regions. Olivia is considering dropping the East region and replacing it with the West region. If this were done, the West region is expected to generate a segment margin of $7,500. The sales volume for the two remaining segments would not be affected. Which of the following statements is correct? OA. The company's operating income will increase by $6,500 if East is replaced with West. B. If East is replaced with West, the company's new operating income will be $28,300. OC. The company's current operating income is $26,800. OD. If East is dropped, the common fixed costs will decrease by $3,000. O E. More than one of the above statements is correct