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The income statement for Bedtime Company is divided by its two product lines, blankets and pillows, as follows: Blankets Pillows Total Sales revenue Variable costs
The income statement for Bedtime Company is divided by its two product lines, blankets and pillows, as follows: Blankets Pillows Total Sales revenue Variable costs Contribution margin Fixed costs Operating income (loss) $630,000 $299,000$929,000 (445,000) (242,000) (687,000) $185,000 $57,000 $242,000 (76,000)(75,000) (151,000) $91,000 $109,000 $(18,000) Bedtime is considering eliminating the pillows product line. If this line is eliminated, Bedtime will be able to eliminate $74,000 of total fixed costs. How would this business decision impact operating income? A. increase of $17,000 in operating income B. increase of $74,000 in operating income C. increase of $132,000 in operating income D. decrease of $57,000 in operating income
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