2 166 Prots nave been decreasing for several yeon Premium Antries. In effort to morove the companys performance. The company Thinking about dropping several times that ear to be more A typical income Matement for one round of one wichtig is fonow Ticaret tati 1. We 11 Com 11 net S Foto Det er Tudo Liity S. Free Image torp sitten fortapte Salarit 1.7 The flowing additionalist * Members of the whereabavedor of round they come bonetes charpente 22 because in menon of the insurance company the deitan of the mannected by contro The begge ding and Democeton of ground con element procongue the one.com begge dendrore 12 dopped. Proto scraprendent Sescence Dead fino 12 de offerte Required Witte oond Profits have been decreasing for several years at Pegasus Airlines. In an effort to improve the company's performance, the company is thinking about dropping several flights that appear to be unprofitable. A typical income statement for one round-trip of one such fight (flight 482) is as follows: Ticket revenue (195 seats 4ek occupancy $240 ticket price) $ 18,720 100.0% Variable expenses ($20.00 per person) 1.560 Contribution margin 17,160 91.7% Flight expenses: Salaries, flight crew $ 1,900 Flight promotion 750 Depreciation of aircraft 1,500 Fuel for aircraft 5,000 Liability insurance 4.880 Salaries, flight assistants 1,400 Baggage loading and flight preparation 1,750 Overnight costs for flight crew and assistants at destination 600 Total flight expenses 171210 Net operating loss $ (550) The following additional information is available about flight 482 a. Members of the flight crew are paid fixed annual salaries, whereas the flight assistants are paid based on the number of round trios they complete. b. One-third of the ability insurance is a special charge assessed against flight 482 because in the opinion of the insurance company. the destination of the flight is in a high-risk area. The remaining two-thirds would be unaffected by a decision to drop filght 482 c. The baggage loading and fight preparation expense is an allocation of ground crews' salaries and depreciation of ground equipment. Dropping flight 482 would have no effect on the company's total baggage loading and fight preparation expenses. d. If flight 482 is dropped. Pegasus Airlines has no authorization at present to replace it with another flight. e Aircraft depreciation is due entirely to obsolescence. Depreciation due to wear and tear is negligible Dropping flight 482 would not allow Pegasus Ainines to reduce the number of aircraft in its fieet or the number of night crew on its payroll Required: $ 18,720 1.50 17,160 10. R. 91.7 Ticket revenue (195 sets occupancy 5240 ticket price) Variable expenses ($20.00 per person) Contribution margin et expenses Salaries, Flight crew Flight promotion Depreciation of aircraft Fuel for aircraft Liability insurance Salaries, light assistants Bare loading and flight preparation overnight costs for flight crew and assistante at destination Total flight expenses Net operating loss 5 1,10 7 1,500 5. 4, 1,750 171710 3 (550) The following additional information is available about flight 482 a. Members of the fight crew are paid fixed annual salaries, whereas the flight assistants are paid based on the number of round trips they complete b. One-third of the liability insurance is a sp cial charge assessed against flight 482 because in the opinion of the insurance company the destination of the flight is in a "high-risk area. The remaining two thirds would be unaffected by a decision to drop flight 482 c. The baggage loading and fight preparation expense is an allocation of ground crews' salaries and depreciation of ground equipment. Dropping Night 482 would have no effect on the company's total baggage loading and flight preparation expenses. d. If flight 482 is dropped, Pegasus Airlines hos no authorization at present to replace it with another flight c. Aircraft depreciation is due entirely to obsolescence. Depreciation due to wear and tear is negligible 1 Dropping flight 482 would not allow Pegasus Airlines to reduce the number of aircraft in its fieet or the number of light crew on its payroll Required: 1. What is the financial advantage (disadvantage of discontinuing flight 482