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:
$$\begin{array} { | l | r | r | r | } \hline & { \text { Blankets } } &{ \text { Pillows } } & { \text { Total } } \\\hline \text { Sales revenue } & \$ 820,000 & \$ 300,000 & \$ 1,120,000 \\\hline \text { Variable costs } & \underline { 465,000 } & \underline { 240,000 } & \underline { 705,000 } \\\hline \text { Contribution margin } & 355,000 & 60,000 & 415,000 \\\hline \text { Fixed costs } & \underline { 66,000 } & \underline { 76,000 } & \underline { 142,000 } \\\hline \text { Operating income (loss) } & \$ 289,000 & \$ ( 16,000 & \$ 273,000 \\\hline\end{array}$$ If Sweet Dreams can eliminate total fixed costs of $28,000 by dropping the pillows line,operating income will increase by $16,000.