The income statement for Sweet Dreams Company is divided by its two product lines, blankets and pillows, as follows:
If Sweet Dreams can eliminate fixed costs of $50,000 by dropping the pillow line, then dropping it should result in which of the following?
A) An increase in total operating income of $16,000.
B) A decrease in total operating income of $10,000.
C) A decrease in total operating income of $34,000.
D) An increase in total operating income of $26,000.
Correct Answer:
Verified
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