Ortega Interiors provides design services to residential and commercial clients. The residential services produce a contribution margin of $460,000 and have traceable fixed operating costs of $500,000. Management is studying whether to drop the residential operation. If closed, the fixed operating costs will fall by $370,000 and Ortega's income will:

increase by $40,000.

increase by $90,000.

increase by $330,000.

decrease by $90,000.

decrease by $330,000.