San Ruiz Interiors provides design services to residential and commercial clients. The residential services produce a contribution margin of $520,000 and have traceable fixed operating costs of $550,000. Management is studying whether to drop the residential operation. If closed, the fixed operating costs will fall by $450,000 and San Ruiz' income will: Multiple Choice A. increase by $30,000. B. increase by $70,000. C. increase by $420,000. D. decrease by $70,000. E. decrease by $420,000.
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