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Pac Coast Airlines has been incurring losses for the past few years. In an attempt to improve the overall financial performance of the company, the
Pac 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 121 from New York, New York to London, England is one such flight. The contribution margin statement for this particular flight is shown below. Pac Coast Airlines - Flight 121 Contribution Margin Statement for the Segment For the Year Ended October 31, 2019 Revenue $1,890,000 Variable Costs $1,515,000 Contribution Margin $375,000 Fixed Costs $845,000 Operating Income $-470,000 The following additional information is also available regarding flight 121: 82% 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 $222,000 in other segments of Pac Coast Airlines. 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 121 $ Avoidable Fixed Costs $ Incremental Contribution Margin - Other Segments $ Incremental Effect $
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