The Income Statement for Sweet Dreams Company Is Divided by Its

The income statement for Sweet Dreams Company is divided by its two product lines, blankets and pillows, as follows:
$\begin{array}{|l|r|r|r|}\hline& \text { Bhankets } & \text { Pillows } & \text { Total } \\\hline \text { Sales revenue } & \$ 620,000 & \$ 300,000 & \$ 920,000 \\\hline \text { Variable expenses } & \underline{465,000} & 240,000 & 705,000 \\\hline \text { Contribution margin } & 155,000 & 60,000 & 215,000 \\\hline \text { rixed expenses } & 76,000 & 76,000 & 152,000 \\\hline \text { Operating income (loss) } & \$ 79,000 & \$(16,000) & \$ 63,000 \\\hline\end{array}$


-
If Sweet Dreams can eliminate total fixed costs of $20,000 by dropping the pillow line, operating income will go up by $36,000.