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Atl Coast Airlines has been incurring losses for the past few years. In an attempt to improve the overall financial performance of the company, the
Atl Coast Airlines has been incurring losses for the past few years. In an attempt to improve the overall financial performance of the company, the general manager is considering discontinuing several of the flights. Flight 129 from New York, New York to Moscow, Russia is one such flight. The contribution margin statement for this particular flight is shown below.
Atl Coast Airlines - Flight 129 Contribution Margin Statement for the Segment For the Year Ended October 31, 2019 | |
Revenue | $1,904,000 |
Variable Costs | $1,567,000 |
Contribution Margin | $337,000 |
Fixed Costs | $826,000 |
Operating Income | $-489,000 |
The following additional information is also available regarding flight 129:
- 75% of the segment's fixed costs will remain with the company if the flight is discontinued. The remaining amount of fixed costs will no longer be incurred by the company if the flight is discontinued.
- If the flight is discontinued, contribution margin will increase by a total of $164,000 in other segments of Atl Coast Airlines.
Calculate the following items:
Calculate the following items: Do not enter dollar signs or commas in the input boxes. Use the negative sign for negative values or items that are subtracted. Lost Contribution Margin - Flight 129 $ Avoidable Fixed Costs $ Incremental Contribution Margin - Other Segments $ Incremental Effect $ CheckStep by Step Solution
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