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The income statement for Eagle, Inc. is divided by its two product lines, blankets and pillows, as follows: Blankets Pillows Total Sales revenue $900,000 $500,000
The income statement for Eagle, Inc. is divided by its two product lines, blankets and pillows, as follows:
| Blankets | Pillows | Total | |
| Sales revenue | $900,000 | $500,000 | $1,400,000 |
| Variable costs | 250,000 | 430,000 | 680,000 |
| Contribution margin | 650,000 | 70,000 | 720,000 |
| Fixed costs | 65,000 | 65,000 | 130,000 |
| Operating income (loss) | $585,000 | $5,000 | $590,000 |
If total fixed costs remain unchanged and Eagle, Inc. drops the pillows line, operating income will decrease by $70,000. T/F
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