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Pac Coast Airlines has been incurring losses for the past few years. In an attempt to improve the overallfinancial performance of the company, the general
Pac Coast Airlines has been incurring losses for the past few years. In an attempt to improve the overallfinancial performance of the company, the general manager is considering discontinuing several of theflights. Flight from Atlanta, Georgia to Paris, France is one such flight. The contribution marginstatement for this particular flight is shown below.Pac Coast AirlinesContribution Margin StatementFor the Year Ended December Flight Revenue $Less: Variable Costs Contribution Margin Less: Fixed Costs Income from Operations $The following additional information is also available regarding flight : of the segments fixed costs will remain with the company if the flight is discontinued. The remaining of the 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 $ in other segments ofPac Coast Airlines.Should flight be discontinued or retained?
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