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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 $300,000

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

$300,000

$930,000

Variable costs

(445,000)

(240,000)

(685,000)

Contribution margin

$185,000

$60,000

$245,000

Fixed costs

(76,000)

(75,000)

(151,000)

Operating income (loss)

$109,000

$(15,000)

$94,000

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?

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