The Income Statement for Bedtime Company Is Divided by Its

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

Bedtime is considering eliminating the pillows product line.If this line is eliminated,Bedtime will be able to eliminate $72,000 of total fixed costs.How would this business decision impact operating income?

A) increase of $72,000 in operating income
B) decrease of $56,000 in operating income
C) increase of $130,000 in operating income
D) increase of $16,000 in operating income

Correct Answer:

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