Ortega Interiors provides design services to residential and commercial clients. The residential services produce a contribution margin of $540,000 and have traceable fixed operating costs of $590,000. Management is studying whether to drop the residential operation. If closed, the fixed operating costs will fall by $490,000 and Ortega's income will:

increase by $50,000.

increase by $50,000.

increase by $440,000.

decrease by $50,000.

decrease by $440,000.