The income statement for Sweet Dreams Company is divided by its two product lines, blankets and pillows, as follows: Blankets Pillows Total $820,000 265,000 Sales revenue $320,000 $1,140,000 525,000 Variable costs 260,000 Contribution margin 555,000 56,000 60,000 615,000 162,000 Fixed costs 106,000 Operating income (loss) $499,000 $(46,000) $453,000 If Sweet Dreams can eliminate total fixed costs of $32,000 by dropping the pillows line, operating income will increase by $46,000. True False
The income statement for Sweet Dreams Company is divided by its two p
The income statement for Sweet Dreams Company is divided by its two product lines, blankets and pillows, as follows: Blankets Pillows Total $820,000 265,000 Sales revenue $320,000 $1,140,000 525,000 Variable costs 260,000 Contribution margin 555,000 56,000 60,000 615,000 162,000 Fixed costs 106,000 Operating income (loss) $499,000 $(46,000) $453,000 If Sweet Dreams can eliminate total fixed costs of $32,000 by dropping the pillows line, operating income will increase by $46,000. True False
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