Pacific Hotel has been incurring losses for the past few years in the lobby gift shop....

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Pacific Hotel has been incurring losses for the past few years in the lobby gift shop. In an attempt to improve the overall financial performance of the company, the general manager is considering closing the space. The contribution margin income statement for the gift shop is shown below. Pacific Hotel Gift Shop Contribution Margin Income Statement For the Year Ended February 28, 2020 Revenue $202,000 Less: Variable Costs $157,000 Contribution Margin Less: Fixed Costs Income from Operations The following additional information is also available regarding the gift shop. • If the shop is closed, 72% of the segment's fixed costs will remain with the company. The remaining 28% of the fixed costs will no longer be incurred by the company if the shop is closed. • If the shop is closed, the contribution margin will increase by a total of $15,000 in other segments of the hotel. $45,000 $86,000 $-41,000 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 - Gift Shop Avoidable Fixed Costs Incremental Effect $ $ Incremental Contribution Margin - Other Segments $ Pacific Hotel has been incurring losses for the past few years in the lobby gift shop. In an attempt to improve the overall financial performance of the company, the general manager is considering closing the space. The contribution margin income statement for the gift shop is shown below. Pacific Hotel Gift Shop Contribution Margin Income Statement For the Year Ended February 28, 2020 Revenue $202,000 Less: Variable Costs $157,000 Contribution Margin Less: Fixed Costs Income from Operations The following additional information is also available regarding the gift shop. • If the shop is closed, 72% of the segment's fixed costs will remain with the company. The remaining 28% of the fixed costs will no longer be incurred by the company if the shop is closed. • If the shop is closed, the contribution margin will increase by a total of $15,000 in other segments of the hotel. $45,000 $86,000 $-41,000 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 - Gift Shop Avoidable Fixed Costs Incremental Effect $ $ Incremental Contribution Margin - Other Segments $

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