The income statement for Slumber Company is divided by its two product lines, blankets and pillows, as follows:

	Blankets	Pillows	Total
Sales revenue	$630,000	$299,000	$929,000
Variable costs	(465,000)	(241,000)	(706,000)
Contribution margin	$165,000	$58,000	$223,000
Fixed costs	(76,000)	(74,000)	(150,000)
Operating income (loss)	$89,000	$(16,000)	$73,000

Slumber is considering eliminating the pillows product line. If this line is eliminated, Slumber will be able to eliminate

$74,000

of total fixed costs. How would this business decision impact operating income?

Question content area bottom

Part 1

A.increase of

$16,000

in operating income

B.decrease of

$58,000

in operating income

C.increase of

$74,000

in operating income

D.increase of

$132,000

in operating income