Valdez Company is considering eliminating its kitchen division, which reported an operating loss of $61,000 for the past year. Kitchen division sales for the year were $1,120,000, and its variable costs were $783,000. The fixed costs of the division were $324,000. If the kitchen division is dropped, 68% of the fixed costs allocated to it could be eliminated. The impact on Valdez's operating income from eliminating this business segment would be:

A. $116,680 increase

B. $263,000 decrease

C. $263,000 increase

D. $116,680 decrease

E. $386,120 decrease