The income statement for Eagle, Inc is divided by its two product lines, blankets and pillows, as follows
Blankets Pillows Total
Sales revenue $800,000 $700,000 $1,500,000
Variable costs 450,000 230,000 680,000
Contribution margin 350,000 470,000 820,000
Fixed costs 65,000 85,000 150,000
Operating income (loss) $285,000 $385,000 $670,000
If total fixed costs remain unchanged and Eagle, Inc drops the pillows line, operating income will decrease by $470,000.
Indicate whether the statement is true or false
TRUE
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