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The income statement for Sweet Dreams Company is divided by its 2 product line: pillows and blankets: blankets pillows total sales $620,000 $300,000 $920,000 variable

The income statement for Sweet Dreams Company is divided by its 2 product line: pillows and blankets:

blankets pillows total
sales $620,000 $300,000 $920,000
variable costs 465,000 240,000 705,000
contribution margin 155,000 60,000 215,000
fixed costs 76,000 76,000 152,000
operating income (loss) 79,000 (16,000) 63,000

If Sweet Dreams can eliminate fixed costs of $50,000 and increase the sale of blankets by 3,000 units at a selling price of $20 per unit and a contribution margin of $5 per unit, then dropping the pillows should result in which of the following?

a. no change in operating income

b. increase in total operating income of $5000

c. decrease in operating income of $5000

d. increase in operating income of $25,000

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