Case 2: Pacific Electronics manufactures and sells two types of lamps: floor lamps and desk lamps. Floor lamps sell for $30 and desk lamps sell for $20. The projected income statement for the coming year appears below: Sales Total variable costs Contribution Margin Total Fixed cost Operating Income $600,000 (400,000) $200,000 (150,000) The management of Pacific estimates that 60% of the company's sales revenue is generated by floor lamps and the remaining 40% by desk lamps. Floor lamps also accounts for 60% of the variable costs.