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:
$$\begin{array} { | l | r | r | r | } \hline & { \text { Blankets } } & { \text { Pillows } } & { \text { Total } } \\\hline \text { Sales revenue } & \$ 620,000 & \$ 320,000 & \$ 940,000 \\\hline \text { Variable costs } & \underline { 465,000 } & \underline { 260,000 } & \underline { 725,000 } \\\hline \text { Contribution margin } & 155,000 & 60,000 & 215,000 \\\hline \text { Fixed costs } & \underline { 66,000 } & \underline { 106,000 } & \underline { 172,000 } \\\hline \text { Operating income (loss) } & \$ 89,000 & \$ ( 46,000 & \$ 43,000 \\\hline\end{array}$$ If Sweet Dreams can eliminate total fixed costs of $32,000 by dropping the pillows line, operating income will increase by $46,000.